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A Pre-seed Angel investment agreement lets early-stage German startups secure their first round of funding from individual investors, typically between €25,000 and €250,000. These contracts follow BGB (German Civil Code) guidelines and establish key terms like company valuation, equity stakes, and investor rights before formal venture capital rounds begin.

Unlike standard investment deals, these agreements often include flexible terms to protect both founders and angels during the risky pre-revenue phase. They commonly feature convertible loan structures (Wandeldarlehen) and specific provisions about future funding rounds, giving angels the right to convert their investment into equity under pre-defined conditions aligned with German corporate law.

Use a Pre-seed Angel investment agreement when your German startup needs its first significant capital injection but isn't ready for formal venture capital. This agreement works best for companies seeking between €25,000 and €250,000 from individual investors, particularly during the product development or market validation phase.

The timing is right when you have a clear business concept, initial team structure, and basic prototype, but need funds to reach key milestones. It's especially valuable if you're planning larger funding rounds within 12-24 months, as it can include provisions for future investment rights while maintaining compliance with German startup investment regulations.

• Pure Equity Investment: Traditional Pre-seed Angel agreements offering direct company shares, typically with voting rights and shareholder protections under German GmbH law
• Convertible Loan (Wandeldarlehen): Debt that converts to equity at the next funding round, popular for its flexibility and simpler valuation process
• SAFE Agreement (Simple Agreement for Future Equity): Modified for German law, offering a streamlined alternative to convertible notes
• Participation Rights (Genussrechte): Hybrid instruments combining debt and equity features, offering profit participation without voting rights
• Co-Investment Structure: Designed for multiple angels investing together, with lead investor provisions and syndicate terms

• Startup Founders: Usually first-time entrepreneurs seeking capital, responsible for negotiating terms and providing company information
• Angel Investors: High-net-worth individuals, often experienced entrepreneurs themselves, who provide capital and mentorship
• Corporate Lawyers: Draft and review agreements, ensure compliance with German investment laws and BGB requirements
• Tax Advisors: Guide both parties on tax implications and structure optimization under German tax regulations
• Business Angels Network: Often facilitate connections and provide standardized agreement templates for their members
• Notaries: Required under German law to authenticate certain aspects of the investment, especially for GmbH share transfers

• Company Details: Gather current capitalization table, company valuation, and business plan with financial projections
• Investment Terms: Define investment amount, equity percentage, and any conversion mechanisms or future rights
• Due Diligence: Prepare key corporate documents, intellectual property records, and existing contracts
• Investor Profile: Collect investor accreditation proof and investment experience documentation per German regulations
• Governance Rights: Outline voting rights, board representation, and information access privileges
• Exit Provisions: Specify tag-along rights, drag-along rights, and anti-dilution protections
• Notarization Plan: Schedule appointment with a German notary for required authentication

• Party Identification: Full legal names, addresses, and registration details of startup and investor
• Investment Terms: Precise amount, valuation basis, and share class or convertible note specifications
• Transfer Provisions: Share transfer restrictions and processes under GmbH law
• Investor Rights: Information rights, voting rights, and participation in future rounds
• Anti-dilution: Protection mechanisms for subsequent financing rounds
• Exit Clauses: Tag-along and drag-along rights under German corporate law
• Governing Law: Explicit reference to German law and jurisdiction
• Notarization Requirements: Compliance with German formal requirements for share transfers

A Pre-seed Angel investment agreement differs significantly from a Seed investment agreement in several key aspects, though both are crucial for German startups seeking capital.

• Investment Stage: Pre-seed agreements typically handle smaller amounts (€25,000-€250,000) during very early stages, while seed agreements manage larger investments (€250,000-€1.5M) for more established startups
• Documentation Requirements: Pre-seed agreements often use simpler terms and lighter due diligence, while seed agreements demand comprehensive documentation and stricter investor protections
• Investor Rights: Pre-seed agreements usually grant basic information rights and minimal control, whereas seed agreements include detailed governance rights and board seats
• Valuation Approach: Pre-seed often uses convertible instruments to delay valuation, while seed rounds require concrete company valuations under German corporate law