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A Seed investment agreement spells out the terms when early-stage investors put money into a startup. It covers how much funding they'll provide, what percentage of the company they'll own, and their rights as investors. These deals typically happen before Series A funding, when companies are just getting off the ground.

The agreement protects both sides by clearly laying out key details like stock class, valuation, and investor protections. Most U.S. startups structure these as convertible notes or SAFE agreements (Simple Agreement for Future Equity), which let investors convert their investment into equity later. The terms usually include provisions about board seats, information rights, and what happens if the company sells or goes public.

Use a Seed investment agreement when your startup needs early funding but isn't ready for a full Series A round. This document becomes essential once you've found investors willing to provide initial capital, typically between $50,000 and $2 million, to help launch your business or fund early development stages.

The timing is crucial - implement this agreement before accepting any investment funds, ideally after verbal commitments but before money changes hands. It's particularly valuable when dealing with angel investors or small venture capital firms who want to secure their rights and define conversion terms early. Many founders use it alongside their first significant hiring push or product development phase.

• Convertible Notes: The most common seed agreement type, offering debt that converts to equity at a future funding round, with specified discount rates and valuation caps
• SAFE (Simple Agreement for Future Equity): A simpler alternative to convertible notes, pioneered by Y Combinator, without interest rates or maturity dates
• Priced Equity Rounds: Traditional stock purchase agreements that set a fixed company valuation and issue preferred shares immediately
• KISS (Keep It Simple Security): A hybrid between SAFEs and convertible notes, offering either debt-like or equity-like features
• Bridge Notes: Short-term convertible instruments designed to "bridge" between funding rounds, often with specific trigger events

• Startup Founders: Sign as company representatives, negotiate terms, and make legally binding commitments about company governance and future equity
• Angel Investors: Provide initial capital, review and negotiate investment terms, and receive rights to future equity or convertible securities
• Startup Attorneys: Draft and review agreements, ensure compliance with SEC regulations, and protect their clients' interests during negotiations
• Investment Advisors: Guide both parties on deal terms, valuation, and standard market practices
• Board Members: Review and approve the agreement terms, often gaining rights or seats through the investment

• Company Details: Gather incorporation documents, cap table, financial statements, and current valuation metrics
• Investment Terms: Define investment amount, valuation cap, discount rate, and conversion mechanics
• Due Diligence: Compile business plan, financial projections, and key contracts for investor review
• Investor Rights: Outline information rights, pro-rata rights, and board participation expectations
• Legal Requirements: Confirm SEC compliance for securities laws and verify accredited investor status
• Document Generation: Use our platform to create a customized agreement that includes all required elements and protections

• Investment Terms: Clearly state amount invested, type of security issued, and valuation or conversion mechanics
• Company Information: Full legal name, incorporation details, and authorized signatories
• Investor Rights: Detail voting rights, information access, and participation in future rounds
• Conversion Mechanics: Specify triggers, valuation caps, discount rates, and calculation methods
• Representations & Warranties: Company's legal status, capitalization, and intellectual property claims
• Transfer Restrictions: Rules for selling or transferring investment securities
• Governing Law: State jurisdiction and dispute resolution procedures

Seed investment agreements are often confused with Pre-seed Angel investment agreement, but they serve different stages of startup funding. Let's explore their key differences:

• Investment Stage: Seed agreements typically involve larger amounts ($250K-$2M) and more formal investors, while pre-seed deals are usually smaller ($50K-$250K) and involve friends, family, or angel investors
• Legal Structure: Seed agreements often use standardized convertible notes or SAFEs with detailed investor rights, while pre-seed deals tend to use simpler terms with fewer protections
• Valuation Approach: Seed rounds usually establish concrete valuation caps and specific conversion terms, whereas pre-seed often uses uncapped notes or flexible terms
• Investor Rights: Seed agreements include more comprehensive rights packages (information rights, pro-rata rights, board seats), while pre-seed typically offers basic conversion rights only