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Convertible Equity Agreement
"I need a Convertible Equity Agreement for my Irish tech startup to secure a €500,000 investment from a venture capital firm, with a 20% discount rate on future funding rounds and a €5 million valuation cap."
1. Parties: Identification of the company and the investor(s), including full legal names and registered addresses
2. Background: Context of the agreement, including the company's business and the investor's intention to invest
3. Definitions: Definitions of key terms used throughout the agreement, including financial terms, conversion-related terminology, and corporate events
4. Investment Amount: Details of the investment amount and payment terms
5. Conversion Rights: Terms and conditions under which the investment converts to equity, including automatic and optional conversion provisions
6. Conversion Price: Methodology for determining the price at which the investment converts to equity, including any discount rates or valuation caps
7. Qualifying Events: Definition and details of events that trigger automatic conversion, such as qualified financing rounds
8. Pre-emptive Rights: Investor's rights to participate in future funding rounds
9. Information Rights: Investor's rights to receive financial and other company information
10. Company Covenants: Company's obligations and restrictions during the term of the agreement
11. Representations and Warranties: Standard representations and warranties from both the company and the investor
12. Termination: Circumstances under which the agreement can be terminated and the consequences
13. Governing Law and Jurisdiction: Specification of Irish law as governing law and jurisdiction for disputes
14. General Provisions: Standard boilerplate provisions including notices, amendments, and assignment
1. Most Favored Nation: Provision ensuring the investor receives the benefit of more favorable terms granted to subsequent investors, used when dealing with sophisticated investors
2. Board Observer Rights: Rights of the investor to appoint a board observer, typically included for larger investments
3. Anti-dilution Protection: Protection against dilution in certain circumstances, often requested by lead investors
4. Tag-Along Rights: Rights to participate in sale of shares by other shareholders, included for significant investments
5. Drag-Along Rights: Company's right to force investor participation in a sale, included when company wants exit flexibility
6. Confidentiality: Detailed confidentiality provisions, included when standard general provisions are insufficient
7. Intellectual Property Protection: Additional IP-related provisions, important for technology companies
8. Founder Commitments: Specific commitments from founders, included when investor requires founder lock-in
1. Schedule 1 - Company Details: Detailed information about the company including capitalization table and corporate structure
2. Schedule 2 - Investment Terms: Detailed terms of the investment including valuation methodology and conversion mechanics
3. Schedule 3 - Conditions Precedent: List of conditions that must be satisfied before investment completion
4. Schedule 4 - Form of Conversion Notice: Template notice for exercising conversion rights
5. Schedule 5 - Reserved Matters: List of actions requiring investor consent
6. Schedule 6 - Warranties: Detailed warranties given by the company and founders
7. Appendix A - Financial Statements: Recent financial statements of the company
8. Appendix B - Business Plan: Company's current business plan and financial projections
Authors
Additional Investment Rights
Affiliate
Anti-dilution Rights
Articles of Association
Board
Business Day
Business Plan
Change of Control
Companies Act
Company
Completion
Completion Date
Confidential Information
Constitution
Conversion
Conversion Date
Conversion Notice
Conversion Price
Conversion Rights
Conversion Shares
Discount Rate
Drag-along Rights
Encumbrance
Equity Securities
Event of Default
Exit Event
Financial Year
Fully Diluted Share Capital
Group
Initial Investment
Investment Amount
Investor
IPO
Issue Price
Material Adverse Change
New Securities
Ordinary Shares
Party/Parties
Pre-emptive Rights
Pre-money Valuation
Post-money Valuation
Qualified Financing
Qualified Financing Round
Qualifying Event
Related Party Transaction
Relevant Securities
Reserved Matters
Share Capital
Shareholders
Shareholders' Agreement
Subscription Price
Tag-along Rights
Termination Date
Transaction Documents
Transfer
Valuation Cap
Warranties
Subscription
Conversion Rights
Pre-emptive Rights
Anti-dilution
Information Rights
Tag-along Rights
Drag-along Rights
Most Favored Nation
Board Rights
Representations and Warranties
Company Covenants
Investor Covenants
Reserved Matters
Confidentiality
Non-competition
Share Transfer Restrictions
Exit Rights
Default
Termination
Assignment
Notices
Costs and Expenses
Entire Agreement
Severability
Variation
Waiver
Further Assurance
Counterparts
Third Party Rights
Force Majeure
Dispute Resolution
Governing Law
Jurisdiction
Technology
Software
Biotechnology
Financial Services
Healthcare
E-commerce
Clean Technology
Manufacturing
Media and Entertainment
Consumer Products
Professional Services
Real Estate Technology
Education Technology
Agricultural Technology
Legal
Finance
Corporate Development
Executive Leadership
Board of Directors
Investment
Compliance
Company Secretariat
Treasury
Risk Management
Chief Executive Officer
Chief Financial Officer
Chief Legal Officer
Investment Director
Corporate Lawyer
Financial Controller
Company Secretary
Board Director
Investment Manager
Venture Capital Partner
Angel Investor
Corporate Development Manager
Finance Director
Business Development Director
Compliance Officer
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