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Advanced Subscription Agreement Template for New Zealand

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Key Requirements PROMPT example:

Advanced Subscription Agreement

"I need an Advanced Subscription Agreement under New Zealand law for a single angel investor investing NZD 500,000 with a 20% discount rate on conversion and a longstop date of March 1, 2025."

Document background
The Advanced Subscription Agreement has become increasingly popular in New Zealand's startup ecosystem as a flexible funding instrument that bridges the gap between initial capital needs and formal equity rounds. This document is specifically designed to comply with New Zealand's regulatory framework, including the Financial Markets Conduct Act 2013 and Companies Act 1993. It is typically used when a company needs immediate funding but determining a precise valuation is premature or impractical. The agreement details the investment terms, conversion mechanisms, investor rights, and company obligations, while incorporating necessary safeguards for both parties. The ASA structure allows investors to provide capital immediately while deferring complex valuation discussions and formal share issuance until a later funding round or specified trigger event.
Suggested Sections

1. Parties: Identification of the company, the investor(s), and any guarantors or other relevant parties

2. Background: Context of the agreement, including the company's business and the purpose of the advanced subscription

3. Definitions and Interpretation: Detailed definitions of key terms and interpretation rules

4. Subscription Amount and Process: Details of the investment amount and the process for paying the subscription funds

5. Conversion Mechanics: Terms governing when and how the investment converts into shares, including conversion price calculations and triggers

6. Qualifying Financing Round: Definition and conditions of what constitutes a qualifying financing round that triggers conversion

7. Longstop Date and Alternative Conversion: Provisions for what happens if no qualifying round occurs by the specified deadline

8. Company Warranties and Undertakings: Standard warranties about the company's status and operations, and ongoing commitments

9. Investor Warranties: Warranties from the investor regarding their status and investment capacity

10. Information Rights: Investor's rights to receive company information and updates

11. Confidentiality: Provisions regarding the confidentiality of company information and the agreement terms

12. General Provisions: Standard boilerplate clauses including notices, amendments, and governing law

Optional Sections

1. Most Favored Nation Clause: Optional provision ensuring the investor receives the benefit of any better terms offered to subsequent ASA investors

2. Pre-emption Rights: Rights of first refusal on future funding rounds, used when offering enhanced investor protection

3. Board Observer Rights: Rights to attend board meetings as an observer, typically for larger investments

4. Discount Rate Provisions: Special terms for conversion discount rates based on timing or other factors

5. Valuation Cap: Maximum valuation at which the investment can convert, used to protect investor upside

6. Multiple Closing Provisions: Used when the ASA is part of a larger round with multiple closings

7. Tag-Along Rights: Rights to participate in future share sales, typically for strategic investors

8. Change of Control Provisions: Special conversion rights in case of an exit event before a qualifying round

Suggested Schedules

1. Schedule 1: Subscription Details: Detailed terms of the subscription including amount, minimum investment, and key dates

2. Schedule 2: Conversion Terms: Detailed mechanics and formulae for conversion calculations

3. Schedule 3: Company Details: Key information about the company including capital structure and existing securities

4. Schedule 4: Warranties: Comprehensive list of company warranties

5. Schedule 5: Deed of Adherence: Form of deed for additional investors to join the agreement

6. Appendix A: Capitalization Table: Current and projected cap table showing impact of conversion

7. Appendix B: Investment Certificate Form: Template for confirming receipt of investment funds

8. Appendix C: Conversion Notice Form: Template for implementing conversion when triggered

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Relevant Industries

Technology

Software

Biotechnology

Fintech

Clean Technology

Healthcare

E-commerce

Digital Media

Agricultural Technology

Manufacturing

Consumer Products

Professional Services

Education Technology

Renewable Energy

Relevant Teams

Legal

Finance

Corporate Development

Executive Leadership

Investment

Compliance

Company Secretariat

Business Development

Strategic Planning

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Company Director

Investment Manager

Venture Capital Partner

Angel Investor

Corporate Lawyer

Investment Lawyer

Company Secretary

Financial Controller

Business Development Manager

Startup Founder

Investment Analyst

Legal Counsel

Compliance Officer

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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