A program may prepare entrepreneurs, develop software, support sales and introduce potential investors. These activities can happen together, but they do not create a single economic relationship. An investor's first task is to identify who provides services, who receives money, who acquires an ownership interest and who undertakes obligations. A document called a partnership agreement may combine a purchase of services, a promise of equity and authority to conduct commercial negotiations. Each component creates different rights and consequences.
An investment starts by separating the relationships
The analysis should distinguish at least three relationships: the company and the program, the company and the investor, and the program and its contractors or investment vehicles. When the same person appears in several roles, this separation becomes more important. Money paid for development does not automatically become capital invested in the company. Likewise, introducing investors does not entitle an accelerator to the money those investors contribute or authorize it to accept proposals on the company's behalf.
An initial relationship map can identify each agreement's purpose, counterparty, compensation, duration, payment conditions and consequences of breach. The documents must then fit together: equity promised under a service agreement must be properly reflected in the relevant corporate instruments. An investor needs to understand both the business being financed and the obligations that will consume its resources, including commitments made before the investment. An undisclosed earlier promise of equity can change the economics even when no cash payment is due.
Distinguishing acceleration, venture building and investment
Accelerators and venture builders can follow different models. Some offer guidance and access to networks; others place product, technology and sales teams inside the operation. Some also invest cash, directly or through a separate vehicle. The commercial label does not establish which services are actually available. Investors should look for evidence of committed time, execution capacity and contractual responsibility. They should also establish whether the people presented during negotiations will perform the work or merely supervise a shared team.
The program's equity may compensate it for services, represent money actually contributed or combine both. That composition should be disclosed. A cash component and a work component each need their own value, schedule and conditions. It also matters who receives the quotas or shares: the service provider, its professionals or an investment vehicle. Where the beneficiaries differ from the people doing the work, the documents should explain how delivery obligations remain enforceable and who is responsible if a professional leaves.
These distinctions change the incentives an investor evaluates. A provider paid in advance may have limited financial motivation to remain involved. A partner earning equity progressively may retain an interest while competing projects divide its attention. No arrangement resolves every issue. The decision depends on useful deliverables, replacement options and total cost. Equity creates lasting economic rights, so investors should compare it with services available for cash, while recognizing that a cash alternative may place greater pressure on the company's immediate budget.
Valuing services: price, cost and usefulness are different
A package advertised at R$ 200,000 does not establish that R$ 200,000 has been invested in the company. Separate the provider's execution cost, the negotiated price and the project's economic benefit. Cost can be lower than price without anything improper occurring: service businesses must cover their overhead and risk. The concern arises when an internal price list is presented as an independent valuation, or unnecessary work receives an inflated value chiefly to justify an equity allocation. A negotiated figure still needs a credible explanation.
A useful assessment breaks the package into comparable deliverables: customer research, product design, implementation, integration and commercial support. For each component, examine scope, personnel, committed time, dependencies and market alternatives. External quotations help when they cover equivalent work. A cheaper proposal excluding maintenance, documentation or the transfer of necessary rights may ultimately cost more than a higher-priced offer. Comparisons should also address revision limits and the work required from the company's own team, since these affect the practical cost.
Usefulness depends on the company's stage. Building a sophisticated feature before validating customer demand can waste cash and time even if the work is technically competent. The agreement may therefore allow unstarted portions to be reordered through a defined approval process. Economic value should reflect usable output and justified priorities. Timesheets and team qualifications support the analysis, but they do not demonstrate that the project received something it can use. Investors should ask which business uncertainty each proposed deliverable is intended to resolve.
Turning promises into verifiable deliverables
Phrases such as strategic support, ecosystem access and complete development do not provide a workable measure of performance. A delivery schedule should identify the expected result, responsible party, relative deadline, required inputs and acceptance criteria. For software, this may include demonstrable functions, documentation and repository access. For commercial support, it may include a diagnosis, sales materials and qualified contacts meeting agreed criteria. Those activities should not be described as a promise to secure customer contracts, funding or a particular level of revenue.
Acceptance must account for real dependencies. A provider may be unable to proceed if the company withholds necessary data or fails to identify a product decision-maker. The consequences should be documented: a paused deadline, a different sequence or a scope revision. Conversely, any delay in replying should not become unrestricted automatic acceptance. A reasonable review period should begin with evidence that the relevant deliverable was made accessible to the authorized reviewer. The reviewer needs enough information to assess the agreed result.
The agreement also needs a correction procedure. Rejection should identify the discrepancy objectively, allow an opportunity to remedy it and lead to another assessment. Significant technical disagreements may go to an independent specialist under an agreed selection and cost mechanism. This protects against both paying for unfinished work and unjustifiably withholding acceptance. Version records and written acceptance decisions make it easier to establish what was assessed. The procedure is most useful when it exposes a specific problem early enough to correct it before the dispute escalates.
A numerical example: stating the cash and service assumptions
Consider a hypothetical company whose legal structure permits the arrangements described. Its founders hold 4 million ownership units, valued in the negotiation at R$ 1 each. An investor contributes R$ 500,000 and receives 500,000 units. The venture builder may earn up to 200,000 units through ten service installments priced at R$ 20,000 each. Each accepted installment creates an entitlement to 20,000 units. There are no other securities, options or ownership interests in this example. These figures illustrate the arithmetic, rather than a market price or recommended valuation.
To compare interests, the parties use a fully diluted reference base including every contemplated unit, even those still conditional on delivery. This totals 4.7 million units: 4 million for the founders, 500,000 for the investor and up to 200,000 for the builder. On that basis, the founders hold approximately 85.11%, the investor 10.64% and the builder up to 4.26%. Rounding may prevent the displayed percentages from adding to exactly 100%. Fully diluted describes the agreed denominator; it does not mean every unit has been issued or carries voting rights.
Only R$ 500,000 enters the company's cash balance. The R$ 200,000 is the contractual price of services compensated with equity, not money available for payroll. If the builder estimates its internal cost at R$ 120,000, that estimate neither automatically changes the R$ 200,000 price nor adds cash to the company. Appropriate instruments must establish the economic arrangement and implement the corporate rights. This example clarifies the negotiation; it does not determine accounting or tax treatment, or establish that every legal form can issue the units described.
Earning equity progressively and handling an interruption
In the example, the builder earns rights as the ten installments are accepted. Depending on the company's legal form and chosen documentation, the arrangement may use conditional rights and corresponding corporate acts. Investors should establish when economic rights arise, when voting rights begin and who monitors fulfillment of the conditions. A spreadsheet displaying an eventual percentage is not a substitute for an enforceable mechanism to acquire, issue or transfer the interest. The acceptance record must connect to the legal steps required to implement each entitlement.
Suppose six installments are accepted and the contract ends before the remaining four, with no other compensation entitlement. The builder has earned rights to 120,000 units. Rights to the remaining 80,000 units are canceled under the agreed mechanism. The final base becomes 4.62 million units. The investor then holds approximately 10.82%, the builder 2.60% and the founders 86.58%. The investor still owns 500,000 units: its percentage rises because the denominator is smaller. No additional investment or transfer to the investor has occurred.
The arrangement must address partially completed work, outstanding payments and rejected deliverables. Termination initiated by the company may have different consequences from abandonment by the provider, provided the distinction is explicit and verifiable. Canceling future entitlements does not erase equity already earned. Removing an established interest requires its own legal basis and mechanism. Treating every departure as automatic forfeiture may create litigation and discourage capable partners. It can also obscure the practical question of which completed assets the company may continue using after termination.
Cash and timing: services do not pay operating bills
Return to the R$ 500,000 cash investment. Assume monthly cash expenses of R$ 60,000, including all operating disbursements contemplated in the exercise, with no cash charge for the builder's installments. Assume customer collections of R$ 20,000 a month begin in month four. There is no further funding, additional tax expense or other cash movement outside those assumptions. These are hypothetical calculation inputs, not a sales forecast or market estimate. Changing the timing of collections or expenses would change the resulting cash position.
Month-end cash, in thousands of reais, would be 440 in month one, 380 in month two and 320 in month three. With the assumed collections, it would fall to 280 in month four, 240 in month five and 200 in month six. It would then decline to 160, 120, 80 and 40, reaching zero in month eleven. The ten service installments do not increase these balances. Monthly totals also simplify reality: bills falling due before customer payments can create a shortfall within a month.
If no customer pays, the company has R$ 20,000 left at the end of month eight and runs short during month nine, assuming unchanged expenses. That scenario supports concrete decisions: reconsider hiring, reduce scope or begin funding discussions before cash is exhausted. Expected revenue is not an existing receivable eligible for a receivables transaction. Investors may require periodic assumption updates and agreed triggers for discussion. An approved budget nevertheless remains a plan whose execution depends on available resources; it does not guarantee that the required cash will arrive.
Equity, convertibles and debt need different contracts
Direct equity provides the rights attached to the quotas or shares acquired, supplemented by the applicable documents. A convertible instrument must specify how and when it may become equity and what rights exist before conversion. Debt creates a payment obligation on its agreed terms and may include collateral or other protections. Calling all these arrangements investments does not remove differences in priority, maturity, voting, risk or potential loss. Receivables transactions likewise depend on identifiable rights and their terms, rather than ownership merely being renamed.
For a convertible, examine conversion events, the price or pricing formula, treatment of charges, negotiated limits and what happens if the anticipated funding round never occurs. A valuation cap may change the amount of equity received; it does not guarantee appreciation or a future buyer. For debt, assess repayment capacity against cash flow. A startup collecting little revenue may face maturities inconsistent with the time needed to build a product and acquire customers. Security can affect recovery options without assuring that sufficient realizable value will exist.
Keep the service contract distinct even when its compensation is linked to one of these instruments. A promise to convert every invoice into equity without a defined formula postpones a dispute. In Brazil, an entrepreneur operating as a MEI cannot admit equity partners while remaining a MEI. A donation to a nonprofit is not an equity investment or a promise of financial return. Loans, receivables, equity, convertibles and donations create different rights and risks. The legal structure must support the actual relationship before commercial labels are applied.
Intellectual property: identifying what the company controls
Investors need to identify who controls the assets required to operate. A product may combine the builder's earlier code, third-party components, employees' new work and material produced by contractors. Each origin can carry different rights and restrictions. A broad statement that the project belongs to the startup may leave gaps if the provider never obtained the necessary rights from the creators. The contractual chain should reach the relevant authors and suppliers. Evidence of development activity alone does not establish a complete chain of rights.
Distinguish assets developed specifically for the company from existing tools used across projects. For new assets, specify the rights transferred, transfer timing and conditions. For existing tools, a license may be sufficient if it supports the intended continuity. Review duration, modification rights, source-code access where needed and the effects of a company sale. A license revocable at the provider's sole discretion may create dependency incompatible with the investment. Investors should understand whether continued operation entails license fees or consent requirements after the builder's engagement ends.
The review extends beyond code to domains, trademarks, databases, models, documentation and administrative credentials. Open-source components also require an inventory and assessment of their respective licenses. The builder's departure should not make maintenance impossible because access or documentation is missing. This does not require the provider to transfer every general-purpose asset it owns. It requires evidence that the company will have sufficient rights and operational means to serve customers and meet its own obligations, including the ability to engage a suitable replacement provider.
Information rights that support decisions
Information rights should produce a usable picture of the business. A periodic reporting package may cover actual cash movements, payment commitments, receivables, product progress and an updated ownership position. It should distinguish signed contracts, proposals and sales opportunities. A list of contacted companies does not prove revenue, and a conditional contract should not appear as certain cash. Reports on the builder may also show accepted, pending and disputed deliverables. Consistent definitions help an investor identify whether a change reflects business performance or a change in classification.
Reporting frequency and detail should fit the company's operating capacity. Requiring extensive weekly reports can consume the team expected to deliver. One approach uses a small set of consistently defined indicators, with deeper review when a material deviation appears. The contract may allow additional access in specified circumstances, such as a material accounting discrepancy or a related-party transaction. It should identify who responds and how incomplete or inconsistent information is corrected. Additional reporting still has a cost, which should be proportionate to the issue being investigated.
Information rights do not provide unrestricted access to personal data or third-party secrets. Documents may require access restrictions, removal or masking of unnecessary data and confidentiality commitments. An investor associated with a competitor may need a specific review procedure to limit competitive exposure. Safeguards should preserve meaningful oversight while preventing indiscriminate circulation of customer, employee and partner information. Guidance from Brazil's National Data Protection Authority, the ANPD, is a reference point for designing this process; access should serve a defined diligence or oversight purpose.
Decision-making powers, vetoes and operating responsibility
Investors may negotiate governance participation, representative appointment rights and approval requirements for specified matters. These powers should match the risks they address. Material borrowing, new equity issuance, sales of essential assets and related-party arrangements are possible subjects. The list needs clear criteria. Requiring consent for every expense can immobilize the business and create informal management expectations that nobody intended to assume. Investors should understand both the protection a reserved matter offers and the operating cost of repeatedly seeking approval for routine decisions.
Separate strategic decisions from everyday execution. Management handles hiring, product and sales within its authority and approved budget. The builder performs contracted work; the investor monitors performance and exercises documented rights. A representative on a board or another governance body should understand the duties attached to that role as well as the expectations of whoever appointed them. A power of attorney to negotiate with suppliers or operate bank accounts requires specific authority and controls appropriate to its purpose. Receiving reports grants no such authority by itself.
The design should address response periods, minimum supporting documents and deadlocks. Silence should not have the same effect for every matter: an operating purchase and a sale of intellectual property have different consequences. Persistent deadlock may trigger negotiation stages and dispute-resolution mechanisms. The aim is to preserve decision-making capacity with effective oversight. A veto does not supply funding, improve a product by itself or replace an assessment of team competence. Its usefulness depends on clear scope, timely exercise and realistic consequences when agreement cannot be reached.
Dilution, subscription rights and exits without promised liquidity
New issuances can reduce an existing investor's percentage ownership. In the example, 10.64% refers to the agreed initial fully diluted base; it is not a permanent percentage. A preemptive subscription right may allow participation in certain issuances under the documents and applicable rules, but exercising it requires more money. Clarify whether future employee interests, convertibles and price adjustments are already included or will enlarge the denominator. Investors should also distinguish a right to participate from an obligation to contribute additional resources.
Anti-dilution provisions use different formulas and produce different effects. Adjusting an earlier entry price after a later round may shift dilution toward founders and other holders, affecting incentives and future negotiations. Economic rights on a sale must also be read together: priority recovery, participation in the remaining proceeds and treatment of different classes can change the distribution. An ownership percentage alone does not show what each party receives when a transaction is priced below expectations. Contractual priority also cannot make proceeds exceed the value actually available.
Tag-along rights and obligations to join a sale can organize an exit, but they need conditions, limits and procedures. A builder compensated in equity should be covered by the relevant rules so an overlooked obligation does not obstruct a transaction. These rights do not create buyers or guarantee liquidity. Diligence should include an allocation exercise for sale proceeds and a loss scenario, showing the contractual order and restrictions affecting receipts. The investor may still receive less than invested or nothing, even where the documents provide extensive exit protections.
Conflicts of interest: disclose, decide and monitor
A builder may simultaneously be a service provider, equity holder, supplier referrer and governance participant. It may also work with businesses competing for customers, talent or technology. These relationships do not make every arrangement unsuitable, but they change incentives. A commission for recommending a tool may encourage a more expensive choice. Assessing its own deliverable may let the builder influence when it earns equity. Investors should identify where these interests intersect and whether the company has a practical means to evaluate decisions independently.
A useful policy records economic links, referral compensation, cross-holdings and relevant supplier relationships. For a particular transaction, the interested party presents the terms, alternatives and business justification; people without the same conflict decide under the agreed procedure. Depending on the structure, independent assessment may be necessary. A general acknowledgment that conflicts exist does not explain why a particular arrangement serves the company's interests. Approval records should make the reasoning understandable, including any material difference between the selected proposal and available alternatives.
Monitoring should continue through execution. Promised discounts must appear in the actual terms, while scope changes and price increases should follow the same approval discipline. Access barriers can limit information sharing between competing projects, but they need accountable owners and verification. The contract should also address commercial opportunities received by the builder. Referral criteria help identify favoritism and allow discussion of departures using evidence rather than suspicion. Disclosing a relationship is a starting point; it does not establish that later changes remain fair or that protective procedures were followed.
Evidence-based diligence and handling discrepancies
Diligence should connect each material claim to suitable evidence. Compare ownership statements with existing corporate acts and instruments; software ownership with contracts and development history; and cash with financial records and reconciliation. Assessing delivery quality requires examining the product and its documentation. Presentations and testimonials can suggest questions, but they do not independently establish revenue, ownership, customer satisfaction or the capacity to maintain a service. Evidence should address the specific assertion being made, rather than merely showing that the project has attracted attention.
Record discrepancies without treating suspicion as established fact. Suppose a presentation reports ten customers, but only four have paying contracts and the others are testing the product. Separate the categories, revise the projection and assess the effect on the decision. If the presentation has circulated, the correction should reach the relevant recipients. Another error is adding service value to cash raised. Correct the sources-and-uses statement while preserving the distinction between received money and equity-based compensation. Accurate categories make the commercial position easier to assess without concealing uncertainty.
When parties disagree about delivery, investors should avoid siding with someone merely because of a close business relationship. Acceptance criteria, test records, versions and communications help reconstruct events. Material gaps may lead to conditions before funding, retention of an installment or revised terms, subject to negotiation. Not every unresolved issue requires ending discussions, but a promised remedy needs an owner, deadline and consequence. Recognized uncertainty is more useful than an unsupported conclusion. The decision should explain which gaps were resolved and which remain part of the investment risk.
Adverse scenarios and business continuity
Suppose the builder stops operating after the sixth installment in the example. The company may have 120,000 units associated with accepted services while still relying on the provider to release fixes. Canceling the four future installments solves only part of the problem. Continuity requires appropriately controlled access, current documentation, verified backups and the ability to engage a replacement. These arrangements need to exist during delivery, before a crisis makes handover difficult. Replacement may still take time and money even when the company holds the necessary rights.
Another scenario is that the team delivers the agreed scope but the product fails to attract customers. Commercial failure does not automatically establish a provider breach. Distinguish a delivery obligation from a promise of economic results. A product missing an essential license or a contracted function requires a different assessment. Defining these boundaries helps allocate risk, estimate replacement costs and prevent every disappointing outcome from becoming a dispute over blame. It also encourages a review of whether the agreed scope addressed the business need in the first place.
If cash runs short, debt, collateral, customer contracts and ownership rights have consequences according to their nature and applicable rules. Do not assume the investor's equity will be recovered ahead of other obligations. Contractual exit can cost money and take time, including dispute resolution. A loss exercise should consider unrecoverable services, product impairment and the absence of a buyer. Controls reduce particular problems without eliminating business risk. There is no guarantee of approval, repayment, profitability, liquidity or preservation of capital, and some losses may remain despite careful negotiation.
Negotiation, documentation and oversight after investment
A coherent negotiation starts with the issues that change the decision: service necessity and price, incoming cash, the builder's maximum equity, product rights and matters requiring approval. Translate those choices into compatible documents. At closing, verify versions, signatures, outstanding conditions, the destination of funds and the ownership table. Subsequent oversight should update delivery, cash and conflicts with named responsibilities. Signing does not complete the monitoring work. Changes in scope or financing should be reflected consistently across the service documents and corporate records.
Technology-based intermediation can help projects and potential funders organize information and compare structures. KEZS connects entrepreneurial projects and potential funders; its project-focused method begins with understanding needs, stage, documentation and the intended relationship. This explains the method's potential usefulness without asserting that any particular operational feature or funding outcome exists. Investors conduct their own diligence and make their own decisions, and KEZS does not assign a credit score. Transparent documentation is useful when assumptions and responsibilities can be checked while private documents remain under restricted access.
Public securities distributions and regulated financial activities require appropriate structures and providers. Technology or a Brazilian CNAE business activity classification does not confer permission. Banco Central and CVM materials are reference entry points for the relevant operation, not evidence of KEZS authorization. If blockchain is used, record integrity does not prove truth, legal ownership, reserve solvency or payment. Private documents should not be placed on public blockchains. Decisions should rest on actual rights, total costs, conflicts and the capacity to bear uncertainty and loss, without assuming a guarantee.
Frequently asked questions.
How can an investor judge whether an accelerator's or builder's requested equity is reasonable?
Compare necessary deliverables with equivalent alternatives, considering quality, timing, rights transfers and future dependence. Calculate ownership on a base that includes all promised rights, then model further issuances. A small percentage may compensate work with little practical value, while a larger percentage may reflect substantial useful work. The percentage alone does not settle the question. Examine when compensation becomes earned, whether it precedes performance and what replacing the provider would cost. The comparison should explain both the immediate cash trade-off and the lasting ownership rights.
Can mentoring, introductions and access to contacts be compensated with equity?
They can form part of a negotiated arrangement with an identifiable scope and appropriate legal implementation. Sessions with an agenda, committed time and records are more verifiable than a vague promise of access. Introducing a contact does not ensure a meeting, contract or investment. Where compensation is linked to fundraising, examine the intermediary's actual role and the applicable regulatory framework. Negotiated equity does not turn those activities into cash received by the company. Assess the service promised separately from outcomes controlled by customers or potential funders.
Who should approve deliverables when the builder also participates in management?
The contract should identify a competent reviewer and address the conflict. The builder may submit evidence and answer questions, but a decision determining its own compensation warrants an independent procedure. For technical issues, a professional without an economic interest in the outcome may assist. The investor need not approve every task: it can monitor exceptions, receive reports and require review when agreed criteria are not followed. The acceptance record should show what was assessed, which criteria applied and how any objection was resolved.
Does diligence require the investor to receive all source code and all company data?
Diligence needs sufficient evidence with proportionate exposure. A controlled technical review can examine quality, dependencies and ownership without distributing complete code copies. Personal data may require minimization, masking or restricted access. The central question is whether the company controls the necessary assets and can operate, make corrections and replace suppliers. Indiscriminate file transfers do not establish intellectual property ownership and can create confidentiality and data protection obligations for recipients. Access should support the review's purpose while respecting restrictions affecting customers, employees, partners and third-party materials.
Can an agreement already granting equity for poorly defined services be corrected?
An amendment can be negotiated, but an investor cannot erase existing rights unilaterally. First reconstruct what was promised, delivered and legally documented. Separate earned equity from rights that remain conditional, then propose clear criteria for future work. Consents and corporate acts may be required. A new investment may include regularization conditions, but it should not treat an earlier obligation as nonexistent merely because it was poorly documented. Clarifying future performance also does not automatically settle a dispute about compensation or ownership already acquired.
What is the difference between information rights and management authority?
Information rights allow monitoring and questions within the agreed scope and applicable rules. Management authority involves powers to act and decide for the company. Receiving reports does not authorize hiring, operating bank accounts or issuing operational instructions. Vetoes and governance seats also have their own scope and associated responsibilities. The distinction should appear in both documents and daily practice, reducing the risk of important decisions being taken informally by people without appropriate powers. A request for explanation should not quietly become an undocumented operating command.
What could justify postponing an investment in an otherwise promising project?
A gap affecting the understanding of rights or operating continuity may justify postponement. Examples include promised equity omitted from the presented ownership table, essential software with an unclear rights chain, service charges incompatible with available cash or an undisclosed material conflict. A response may be an objective regularization condition specifying evidence, responsibility and a deadline. The project's potential remains a hypothesis. After examining available facts, the investor decides whether the remaining uncertainty is acceptable; a promise to resolve a gap is not evidence that it has been resolved.
References and context
Institutional reference points for checking applicable rules and guidance. Calculations and scenarios are original examples, not quotes, historical results or individualized recommendations.
- Banco Central — correspondentes no País ↗
- CVM — Resolução 88, texto e alterações ↗
- CVM — Resolução 175, fundos de investimento ↗
- Portal do Empreendedor — perguntas sobre MEI ↗
- ANPD — orientações e perguntas frequentes ↗
AI-assisted educational content. Decisions require verification of the information, instruments and providers in each actual case.
