Ƶ

Seed investment agreement Template for South Africa

Create a bespoke document in minutes, or upload and review your own.

4.6 / 5
4.8 / 5

Let's create your document

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Get your first 2 documents free

Your data doesn't train Genie's AI

You keep IP ownership of your information

Key Requirements PROMPT example:

Seed investment agreement

I need a seed investment agreement for an early-stage tech startup seeking R1 million in exchange for 10% equity. The agreement should include a vesting schedule for founders, a right of first refusal for future funding rounds, and a clause for investor participation in strategic decisions.

What is a Seed investment agreement?

A Seed investment agreement sets out the terms when early-stage investors put money into a startup in South Africa, typically in exchange for shares or convertible notes. These agreements protect both founders and investors by clearly spelling out key details like valuation, share price, and investor rights under the Companies Act.

The agreement also establishes important governance rules, including board representation and voting rights. Most South African seed deals range from R500,000 to R2 million, with investors usually getting preferred shares that come with special rights like anti-dilution protection and first refusal on future funding rounds.

When should you use a Seed investment agreement?

Use a Seed investment agreement when your startup needs its first major capital injection from external investors in South Africa. This agreement becomes essential once you've moved beyond friends-and-family funding and are ready to bring in angel investors or early-stage venture capital firms who expect formal investment terms.

The timing is right when you need R500,000 to R5 million to scale your business, but aren't yet ready for Series A funding. Having this agreement in place protects both parties during this critical growth phase and helps avoid future disputes about ownership, control, and investor rights under the Companies Act.

What are the different types of Seed investment agreement?

  • Basic equity investment: The standard Seed investment agreement where investors receive ordinary shares, common in South African tech startups
  • SAFE agreements: Simple agreements for future equity that convert to shares later, gaining popularity among Cape Town's startup hub
  • Convertible notes: Debt-based agreements that convert to equity, often used when valuation is unclear
  • Preference share structures: Gives investors priority rights on dividends and liquidation, popular with venture capital firms
  • Hybrid structures: Combines elements of debt and equity, offering flexibility for both parties under SA company law

Who should typically use a Seed investment agreement?

  • Startup Founders: Sign the Seed investment agreement as company representatives, often after negotiating key terms like valuation and board rights
  • Angel Investors: Individual investors who provide early-stage capital, typically between R500,000 and R2 million
  • Venture Capital Firms: Professional investment companies participating in seed rounds, often leading deal negotiations
  • Corporate Lawyers: Draft and review agreements to ensure compliance with SA Companies Act and protect client interests
  • Company Directors: Must approve and implement the agreement's terms as part of their fiduciary duties

How do you write a Seed investment agreement?

  • Company Details: Gather current shareholding structure, company registration documents, and director information
  • Valuation Data: Determine pre-money valuation and share price calculation methodology
  • Investment Terms: Define amount, type of shares, and any special rights or restrictions
  • Due Diligence: Prepare financial statements, business plan, and relevant contracts for investor review
  • Governance Rules: Outline board composition, voting rights, and decision-making processes
  • Exit Provisions: Detail mechanisms for future funding rounds, share transfers, and potential company sale

What should be included in a Seed investment agreement?

  • Party Details: Full legal names, registration numbers, and addresses of the company and all investors
  • Investment Terms: Precise amount, share class, price per share, and payment conditions
  • Warranties: Company representations about its financial status, assets, and legal compliance
  • Shareholders' Rights: Voting powers, board representation, and pre-emptive rights on future shares
  • Transfer Restrictions: Rules for selling shares, tag-along and drag-along provisions
  • Exit Mechanisms: Procedures for IPO, company sale, or winding up
  • Dispute Resolution: South African jurisdiction and arbitration procedures

What's the difference between a Seed investment agreement and a Pre-seed Angel investment agreement?

A Seed investment agreement differs significantly from a Pre-seed Angel investment agreement in several key aspects, though both deal with early-stage funding. Understanding these differences helps you choose the right agreement for your funding stage.

  • Investment Size: Seed rounds typically involve R500,000 to R5 million, while pre-seed deals are usually under R500,000
  • Investor Profile: Seed agreements often involve professional investors or VCs, while pre-seed deals are typically with angel investors or family offices
  • Legal Complexity: Seed agreements include more sophisticated terms like anti-dilution rights and detailed governance provisions; pre-seed agreements are usually simpler
  • Company Stage: Pre-seed deals happen at idea or prototype stage, while seed funding comes when there's some market validation
  • Valuation Approach: Seed rounds require formal valuation methods, while pre-seed often uses convertible instruments or rough estimates

Get our South Africa-compliant Seed investment agreement:

Access for Free Now
*No sign-up required
4.6 / 5
4.8 / 5

Find the exact document you need

No items found.

Download our whitepaper on the future of AI in Legal

By providing your email address you are consenting to our Privacy Notice.
Thank you for downloading our whitepaper. This should arrive in your inbox shortly. In the meantime, why not jump straight to a section that interests you here: /our-research
Oops! Something went wrong while submitting the form.

ұԾ’s Security Promise

Genie is the safest place to draft. Here’s how we prioritise your privacy and security.

Your documents are private:

We do not train on your data; ұԾ’s AI improves independently

All data stored on Genie is private to your organisation

Your documents are protected:

Your documents are protected by ultra-secure 256-bit encryption

Our bank-grade security infrastructure undergoes regular external audits

We are ISO27001 certified, so your data is secure

Organizational security

You retain IP ownership of your documents

You have full control over your data and who gets to see it

Innovation in privacy:

Genie partnered with the Computational Privacy Department at Imperial College London

Together, we ran a £1 million research project on privacy and anonymity in legal contracts

Want to know more?

Visit our for more details and real-time security updates.