Venture Capital Agreement Template for New Zealand

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Key Requirements PROMPT example:

Venture Capital Agreement

"I need a Venture Capital Agreement for a Series A investment of NZD 5 million in my SaaS company, with specific provisions for international investors and enhanced information rights, compliant with New Zealand law."

Document background
The Venture Capital Agreement serves as the primary investment document for venture capital transactions in New Zealand. It is typically used when a venture capital firm or investment syndicate makes a significant equity investment in a high-growth potential company. The agreement must comply with New Zealand's legal framework, particularly the Companies Act 1993, Financial Markets Conduct Act 2013, and relevant securities regulations. This document comprehensively addresses key aspects such as investment terms, shareholder rights, governance structures, transfer restrictions, and exit mechanisms. It includes specific provisions for investor protections, anti-dilution measures, board composition, information rights, and procedures for future funding rounds. The agreement is crucial for establishing clear expectations and legal obligations between investors and the company, while ensuring alignment with New Zealand's business and regulatory environment.
Suggested Sections

1. Parties: Identification of all parties to the agreement including the company, investors, and any other relevant stakeholders

2. Background: Context of the investment, company's business, and purpose of the agreement

3. Definitions: Detailed definitions of key terms used throughout the agreement

4. Investment Terms: Details of the investment amount, share class, price per share, and payment terms

5. Conditions Precedent: Conditions that must be satisfied before the investment becomes effective

6. Completion: Process and requirements for completing the investment transaction

7. Warranties and Representations: Statements of fact and assurances from the company and founders

8. Investor Rights: Specific rights granted to investors including board representation, information rights, and voting rights

9. Transfer Restrictions: Limitations on the transfer of shares and pre-emptive rights

10. Tag-Along and Drag-Along Rights: Rights relating to the sale of shares in specific circumstances

11. Reporting and Information Rights: Company's obligations regarding financial and operational reporting to investors

12. Exit Provisions: Terms governing company sale, IPO, or other exit events

13. Confidentiality: Obligations regarding confidential information

14. Dispute Resolution: Process for resolving disputes between parties

15. General Provisions: Standard legal provisions including governing law, notices, and amendments

Optional Sections

1. Anti-Dilution Protection: Provisions protecting investors from dilution in future funding rounds

2. Founder Vesting: Terms for founder share vesting, typically included when founders retain significant ownership

3. Employee Share Option Pool: Details of ESOP structure and administration, if applicable

4. Strategic Investor Rights: Special rights for strategic investors, such as first right of refusal on commercial contracts

5. Industry-Specific Compliance: Additional provisions for regulated industries or specific compliance requirements

6. Intellectual Property Assignment: Specific IP transfer or licensing provisions, crucial for technology companies

7. Non-Compete and Non-Solicitation: Restrictions on competitive activities and employee solicitation

8. Follow-On Investment Rights: Rights of existing investors to participate in future funding rounds

Suggested Schedules

1. Schedule 1: Capital Structure: Detailed breakdown of company's share capital pre and post-investment

2. Schedule 2: Warranties: Comprehensive list of company and founder warranties

3. Schedule 3: Company Information: Key company information including corporate documents, intellectual property, and material contracts

4. Schedule 4: Completion Requirements: Detailed list of documents and actions required for completion

5. Schedule 5: Reserved Matters: List of decisions requiring investor approval

6. Schedule 6: Management Accounts: Recent financial statements and management accounts

7. Appendix A: Form of Deed of Adherence: Template for new shareholders joining the agreement

8. Appendix B: Board Meeting Procedures: Procedures for board meetings and corporate governance

9. Appendix C: Conversion Rights: Details of any share conversion rights and procedures

Authors

Alex Denne

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

Relevant legal definitions
Clauses
Relevant Industries

Technology

Healthcare

Financial Services

Clean Energy

Biotechnology

Software

E-commerce

Manufacturing

Artificial Intelligence

Agriculture Technology

Medical Devices

Consumer Products

Digital Media

Telecommunications

Education Technology

Relevant Teams

Legal

Finance

Investment

Compliance

Corporate Development

Risk Management

Board of Directors

Executive Leadership

Company Secretariat

Due Diligence

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Investment Manager

Venture Capital Partner

Corporate Lawyer

Investment Director

Company Secretary

Compliance Officer

Due Diligence Manager

Portfolio Manager

Managing Director

Board Director

Investment Analyst

Legal Counsel

Finance Director

Industries
Companies Act 1993: Primary legislation governing company formation, operation, and management in New Zealand. Crucial for understanding corporate structures, shareholder rights, and governance requirements.
Financial Markets Conduct Act 2013: Regulates financial market conduct and offerings of financial products, including venture capital investments and securities issuance.
Contract and Commercial Law Act 2017: Provides the fundamental framework for contract formation, enforcement, and commercial dealings in New Zealand.
Overseas Investment Act 2005: Relevant if the venture capital investment involves overseas investors, setting out requirements and restrictions for foreign investment.
Income Tax Act 2007: Covers tax implications of investments, including treatment of venture capital investments, capital gains, and investment returns.
Fair Trading Act 1986: Ensures fair dealing in commercial transactions and prohibits misleading or deceptive conduct in business dealings.
Limited Partnerships Act 2008: Relevant if the venture capital fund is structured as a limited partnership, providing framework for LP formation and operation.
Financial Service Providers (Registration and Dispute Resolution) Act 2008: May be relevant if the venture capital firm provides financial services, requiring registration and compliance with dispute resolution schemes.
Anti-Money Laundering and Countering Financing of Terrorism Act 2009: Sets out requirements for due diligence and verification of investment sources and investors.
Privacy Act 2020: Governs the collection, use, and disclosure of personal information in business transactions and investments.
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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