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A Seed investment agreement is a legal contract that sets the terms when early-stage investors put money into Austrian startups in exchange for equity. It outlines the key details like valuation, investment amount, and the percentage of ownership the investors will receive. Under Austrian corporate law, these agreements typically include specific rights for minority shareholders and compliance with the GmbHG (Limited Liability Companies Act).

Beyond the basic investment terms, seed agreements shape how the startup will operate going forward. They cover crucial points like voting rights, board seats, anti-dilution protection, and reporting requirements. Most Austrian seed rounds use standardized templates from organizations like Austrian Angel Investors Association (aaia) to make the process smoother for both founders and investors.

Use a Seed investment agreement when your Austrian startup needs early-stage funding and you're ready to exchange equity for capital. This agreement becomes essential once you've found investors willing to contribute funds—typically between €50,000 and €500,000—and need to formalize the investment terms. The timing often aligns with completing your initial business validation and needing capital to scale operations.

The agreement comes into play after initial discussions with investors but before any money changes hands. It's particularly crucial when bringing in multiple investors, as Austrian law requires clear documentation of ownership structures. Having this agreement in place helps avoid future disputes about equity stakes, voting rights, and investor privileges—especially during subsequent funding rounds.

• Convertible Note Agreement: Common for quick funding rounds, this variation lets investors loan money that converts to equity later, usually during the next financing round. Popular with Austrian tech startups.
• Standard Equity Investment: Direct share purchase agreement with immediate equity stakes. Includes detailed governance rights and typically follows AAIA templates.
• SAFE Agreement (Simple Agreement for Future Equity): Less common in Austria but gaining popularity, especially among international investors. Offers simplified terms without debt components.
• Participating Preferred Agreement: Used when investors want special economic rights, like getting their investment back first plus sharing in remaining proceeds.

• Startup Founders: Negotiate and sign the agreement as company representatives, often seeking legal counsel to protect their interests and maintain control rights.
• Angel Investors: Provide the seed capital and review terms carefully, particularly focusing on valuation, equity stakes, and exit provisions.
• Corporate Lawyers: Draft and review agreements to ensure compliance with Austrian corporate law, especially GmbHG requirements.
• Business Accelerators: Often facilitate the investment process and may be party to the agreement if providing additional support services.
• Notaries: Required under Austrian law to authenticate signatures and verify company registry details for the investment.

• Company Details: Gather current company valuation, share structure, and registry extract (Firmenbuchauszug) from the Austrian Commercial Register.
• Investment Terms: Document the exact investment amount, equity percentage offered, and any specific investor rights or privileges.
• Due Diligence: Compile financial statements, business plan, and existing contracts that could affect the investment.
• Investor Information: Collect KYC documentation and proof of funds from all participating investors.
• Legal Requirements: Ensure compliance with Austrian minimum share capital rules and prepare for notarization requirements.
• Existing Agreements: Review any shareholders' agreements or bylaws that might impact new investor rights.

• Parties Section: Full legal names, addresses, and registration numbers of the startup and all investors.
• Investment Terms: Precise amount, valuation, and number of shares being issued under Austrian GmbHG rules.
• Warranties: Company representations about financial status, intellectual property, and existing obligations.
• Voting Rights: Clear specification of investor voting privileges and any veto rights on key decisions.
• Exit Provisions: Tag-along and drag-along rights, plus procedures for future funding rounds.
• Governing Law: Explicit reference to Austrian law and jurisdiction for dispute resolution.
• Notarization Clause: Required statement about formal authentication under Austrian corporate law.

A Seed investment agreement differs significantly from a Pre-seed Angel investment agreement in several key aspects, though both are crucial for Austrian startups seeking early-stage funding. The main distinctions lie in the timing, investment size, and level of formality required.

• Investment Stage: Seed agreements typically involve larger amounts (€50,000-€500,000) and come after initial market validation, while pre-seed deals are smaller (€10,000-€50,000) and focus on concept development.
• Legal Requirements: Seed agreements must comply with stricter Austrian corporate law requirements, including mandatory notarization and detailed shareholder rights. Pre-seed agreements often have simpler structures.
• Investor Rights: Seed agreements include more comprehensive protective provisions, detailed reporting requirements, and specific board representation rights. Pre-seed deals usually have basic investor protections only.
• Valuation Approach: Seed rounds require formal company valuation, while pre-seed often uses convertible instruments or simpler valuation methods.