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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
Authors
Board
Business Day
Capital Reorganisation
Company
Completion
Conversion
Conversion Price
Conversion Rights
Discount Rate
Equity Securities
Exit
Fair Market Value
Fully Diluted Share Capital
Investment Amount
Investor
IPO
Liquidation Event
Most Favored Nation Rights
Qualifying Financing
Qualifying Financing Securities
Post-Money Valuation Cap
Pre-Money Valuation
Pro-rata Rights
Safe Preferred Shares
Safe Price
Share
Shareholders' Agreement
Subscription Amount
Trigger Event
Valuation Cap
Working Day
Conversion Rights
Conversion Mechanics
Company Representations and Warranties
Investor Representations and Warranties
Most Favored Nation Provisions
Pro-rata Rights
Information Rights
Participation Rights
Events of Default
Exit Rights
Liquidation Preference
Transfer Restrictions
Drag Along Rights
Tag Along Rights
Board Rights
Anti-dilution Protection
Confidentiality
Assignment
Notices
Governing Law
Jurisdiction
Entire Agreement
Amendments
Severability
Counterparts
Further Assurance
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