A private investor is an individual who provides financial support in a project with the expectation of a return on their investment and/or obtains ownership of the work or equity in the project. Financing a project through private investments or equity agreements can be quite tricky to do legally. The Fiscal Sponsorship Agreement alone would not permit the use of investors. Thankfully, Fractured Atlas offers a Hybrid addendum to the Fiscal Sponsorship Agreement that would allow for projects to seek private investors.
The Hybrid Addendum details required policies and procedures when it comes to investors, and outlines the relationship between Fractured Atlas, the fiscally sponsored project, and the investor(s). Some key points are;
- Investors cannot also be donors.
- All investment income must be maintained in a separate bank account than the one used for fiscal sponsorship grant income.
- Fractured Atlas must review all investor or equity agreements before they are signed.
This addendum must also be signed if a project decides to seek commercial distribution for their project.
This addendum would need to be signed by the sponsored project before investors are contacted.
Please contact Fractured Atlas at firstname.lastname@example.org if you intend to seek equity investments or a distribution agreement.