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Simple Agreement For Equity
"I need a Simple Agreement For Equity for my UK-based technology startup to secure a £500,000 investment from an angel investor, with a valuation cap of £5 million and including pro-rata rights for future funding rounds, to be completed by March 2025."
1. Parties: Identification of the company and investor, including full legal names and registered addresses
2. Background: Context of the investment and purpose of the agreement, including company status and investment rationale
3. Definitions: Key terms used throughout the agreement including Qualified Financing, Valuation Cap, and Conversion Price
4. Investment Amount: Specified amount to be invested and payment terms
5. Events Triggering Conversion: Circumstances under which the investment converts to equity, including qualified financing, exit, and dissolution events
6. Conversion Mechanism: Detailed process and formula for converting the investment into equity shares
7. Company Representations: Key warranties about the company's status, authority, and compliance with laws
1. Most Favored Nation: Provision ensuring investor receives the most favorable terms offered to any other SAFE investor
2. Pro-rata Rights: Rights allowing investor to maintain their percentage ownership in future funding rounds
3. Information Rights: Investor's rights to receive periodic financial and operational information from the company
4. Board Observer Rights: Rights to attend and observe board meetings without voting rights
1. Schedule 1 - Cap Table: Current shareholding structure and capitalization of the company
2. Schedule 2 - Conversion Calculations: Detailed methodology and examples for calculating conversion prices and share allocation
3. Schedule 3 - Form of Shareholders Agreement: Template shareholders agreement to be executed upon conversion of the SAFE
4. Schedule 4 - Company Constitutional Documents: Current Articles of Association and other constitutional documents
5. Schedule 5 - Deed of Adherence: Form of deed to be executed upon conversion to bind the investor to existing agreements
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