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Continuous Agreement For Future Equity
"I need a Continuous Agreement For Future Equity for my tech startup to secure a £500,000 investment from an angel investor, with a 20% discount rate and a £5M valuation cap, to be completed by March 2025."
1. Parties: Identification and details of the contracting parties
2. Background: Context and purpose of the agreement
3. Definitions: Key terms used throughout the agreement
4. Purchase Amount: Investment amount and payment terms
5. Events: Qualifying events triggering conversion rights
6. Conversion Rights: Terms and mechanics of conversion into equity
7. Company Representations: Key warranties and representations by the company
1. Pro-rata Rights: Rights allowing investors to participate in future funding rounds to maintain their ownership percentage
2. Information Rights: Provisions granting investors rights to receive periodic financial and operational information from the company
3. MFN Provision: Most favored nation clause ensuring investors receive the best terms offered to subsequent investors
1. Cap Table: Current shareholding structure showing ownership percentages and share classes
2. Calculation Methods: Detailed methodology for calculating conversion price and other financial terms
3. Form of Shareholders' Agreement: Template of shareholders' agreement to be entered into upon conversion
4. Corporate Authorizations: Copies of relevant board and shareholder resolutions authorizing the agreement
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