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A Pre-seed Angel investment agreement is a legal contract between early-stage startup founders and angel investors who provide initial funding before the company raises its first major round of capital. It outlines how much money the investor will contribute, what percentage of ownership they'll receive, and key terms like voting rights and board representation.

Under Canadian securities laws, these agreements typically include accredited investor certificates and specific provisions about share classes that comply with provincial regulations. They're simpler than later-stage venture capital deals but still protect both parties by spelling out valuation terms, investment timelines, and what happens if the company needs more funding or gets sold.

Use a Pre-seed Angel investment agreement when your startup needs its first round of outside funding but isn't ready for formal venture capital. This agreement becomes essential once you've found angel investors willing to contribute capital, typically between $25,000 and $250,000, in exchange for equity in your company.

The timing is critical - you need this agreement before any money changes hands, usually after initial discussions but before due diligence begins. Canadian securities regulators require proper documentation of early-stage investments, and this agreement helps protect both parties by clearly defining ownership stakes, valuation terms, and investor rights while complying with provincial regulations.

• Simple Equity Agreement: Most basic version offering straight equity for cash, typically used for small investments under $50,000 with minimal special terms
• Convertible Note Agreement: Structures the investment as debt that converts to equity during the next funding round, popular with investors seeking future price flexibility
• SAFE Agreement: Canadian adaptation of Y Combinator's Simple Agreement for Future Equity, offering standardized terms without interest or maturity dates
• Co-Investment Agreement: Used when multiple angels invest together, including provisions for shared due diligence and coordinated voting rights
• Strategic Angel Agreement: Includes additional terms for investors bringing industry expertise, like advisory roles or strategic partnership options

• Startup Founders: Create and sign these agreements when seeking early funding, often working with lawyers to ensure their company's interests are protected
• Angel Investors: High-net-worth individuals who provide capital in exchange for equity, must qualify as accredited investors under Canadian securities laws
• Corporate Lawyers: Draft and review agreements to ensure compliance with provincial securities regulations and protect both parties' interests
• Company Directors: Review and approve the terms, particularly regarding share issuance and voting rights
• Securities Regulators: Oversee compliance with Canadian investment rules, particularly regarding accredited investor requirements

• Company Details: Gather incorporation documents, shareholder information, and current capitalization table
• Investment Terms: Document the amount being invested, equity percentage offered, and any special rights or restrictions
• Investor Verification: Collect accredited investor documentation as required by Canadian securities regulations
• Valuation Method: Determine and document how the company's pre-money valuation was calculated
• Board Approval: Prepare board resolutions authorizing the investment and share issuance
• Due Diligence: Compile financial statements, business plan, and key contracts for investor review
• Documentation Review: Use our platform to generate a legally compliant agreement that includes all required elements

• Parties & Definitions: Full legal names of investor and company, plus clear definitions of key terms
• Investment Terms: Precise amount, share class, price per share, and payment mechanics
• Representations & Warranties: Company's legal status, ownership structure, and investor's accredited status
• Rights & Obligations: Voting rights, board seats, information rights, and pre-emptive rights
• Transfer Restrictions: Rules for selling shares, right of first refusal, tag-along rights
• Exit Provisions: Terms for company sale, IPO, or dissolution
• Governing Law: Specification of applicable provincial jurisdiction and dispute resolution process
• Signature Block: Formal execution section with date and authorized signatures

A Pre-seed Angel investment agreement differs significantly from a Seed investment agreement in several key aspects, though both handle early-stage funding. Understanding these differences helps ensure you choose the right agreement for your funding stage.

• Investment Size: Pre-seed typically involves smaller amounts ($25,000-$250,000) from individual angels, while seed rounds usually range from $500,000 to $2 million from institutional investors
• Investor Requirements: Pre-seed focuses on individual accredited investors, while seed agreements accommodate professional venture capital firms with more complex compliance needs
• Documentation Complexity: Pre-seed agreements are usually simpler, with basic terms and protections, while seed agreements include more sophisticated provisions for multiple investors
• Valuation Methods: Pre-seed often uses convertible instruments or simple equity, while seed rounds typically require detailed valuation and complex share structure provisions