Venture Deals · glossary
A statement of fact in the agreement, with a claim for damages if it is untrue. On a round the warranties work more as a checklist than as insurance. Schedule 4 · Chapter 10
Explained in Chapter 10, Warranties, Disclosure and Completion, of Venture Deals.
The main page for this term is Warranty, in M&A Foundations.
A warranty is a statement of fact in the investment agreement, and the investor can claim damages if it is untrue. On a share sale the seller gives the warranties, because the seller takes the money. On a funding round the money goes into the company, so the company and its founder give them instead. A disclosure letter lists the exceptions, and the agreement limits what anyone can claim.Read Chapter 10, Warranties, Disclosure and Completion →
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