ANGEL INVESTMENT AGREEMENT
THIS ANGEL INVESTMENT AGREEMENT ("Agreement") is made and entered into as of [Date] ("Effective Date"),
BETWEEN:
[Company Name], a [State] corporation, with its principal place of business at [Company Address] ("Company"),
AND:
[Investor Name], an individual/entity located at [Investor Address] ("Investor").
WHEREAS, the Company desires to raise capital for business operations and growth; and WHEREAS, the Investor desires to invest in the Company on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Parties agree as follows:
1. DEFINITIONS
1.1 "Shares" means the shares of [Common/Preferred] Stock of the Company to be issued to the Investor pursuant to this Agreement.
1.2 "Valuation" means the pre-money valuation of the Company, agreed at $[Amount] as of the Effective Date.
1.3 "Closing" means the completion of the investment transaction contemplated by this Agreement.
1.4 "Material Adverse Effect" means any event, occurrence, or condition that has or could reasonably be expected to have a material adverse effect on the business, assets, condition, or prospects of the Company.
1.5 "Intellectual Property" means all patents, trademarks, copyrights, trade secrets, domain names, and other proprietary rights owned or licensed by the Company.
2. INVESTMENT TERMS
2.1 Investment Amount. The Investor agrees to invest $[Investment Amount] ("Investment Amount") in the Company.
2.2 Equity Stake. In exchange for the Investment Amount, the Company shall issue to the Investor [Number] shares of [Common/Series Seed Preferred] Stock, representing approximately [Percentage]% of the Company's fully-diluted capitalization immediately following the Closing.
2.3 Pre-Money Valuation. The Parties agree that the pre-money valuation of the Company is $[Pre-Money Valuation].
2.4 Use of Funds. The Investment Amount shall be used by the Company for the following purposes: (a) product development: $[Amount]; (b) marketing and sales: $[Amount]; (c) hiring key personnel: $[Amount]; (d) working capital and general corporate purposes: $[Amount].
2.5 Closing Date. The Closing shall occur on or before [Closing Date], subject to the satisfaction of all conditions precedent set forth in Section 6.
3. INVESTOR RIGHTS AND PROTECTIONS
3.1 Information Rights. The Company shall provide the Investor with: (a) annual audited financial statements within 120 days of fiscal year end; (b) quarterly unaudited financial statements within 45 days of quarter end; (c) annual operating budget at least 30 days before each fiscal year; (d) prompt notice of any Material Adverse Effect.
3.2 Board Observer Rights. The Investor shall have the right to appoint one (1) non-voting observer to the Company's Board of Directors, who shall receive all materials provided to Board members and attend all Board meetings.
3.3 Pro-Rata Rights. The Investor shall have the right to participate in future equity financing rounds on a pro-rata basis to maintain their percentage ownership in the Company.
3.4 Anti-Dilution Protection. If the Company issues additional shares at a price per share lower than the price paid by the Investor ("Down Round"), the Investor's conversion price shall be adjusted using the [weighted-average/full-ratchet] anti-dilution method.
3.5 Liquidation Preference. In the event of any liquidation, dissolution, or winding up of the Company, or any Deemed Liquidation Event, the Investor shall receive an amount equal to [1x/1.5x/2x] the Investment Amount plus any declared but unpaid dividends before any distributions to holders of Common Stock.
3.6 Drag-Along Rights. If holders of at least [Percentage]% of the Company's outstanding shares approve a sale of the Company, all other shareholders shall be required to participate in such transaction on the same terms and conditions.
3.7 Tag-Along Rights. If any founder or major shareholder proposes to sell their shares to a third party, the Investor shall have the right to participate in such sale on the same terms and conditions, pro rata to their ownership percentage.
4. COMPANY REPRESENTATIONS AND WARRANTIES
4.1 Organization. The Company is duly organized, validly existing, and in good standing under the laws of [State], with full corporate power to conduct its business as presently conducted.
4.2 Authorization. The execution and delivery of this Agreement and the issuance of the Shares have been duly authorized by all necessary corporate action, including Board and shareholder approval.
4.3 Capitalization. The Company's authorized capital stock consists of [Number] shares of Common Stock and [Number] shares of Preferred Stock. The issued and outstanding shares are as set forth in Schedule A.
4.4 Financial Statements. The financial statements provided to the Investor are complete and accurate in all material respects and present fairly the financial condition of the Company.
4.5 Intellectual Property. The Company owns or has valid licenses to all Intellectual Property necessary for its business operations, and such IP does not infringe upon the rights of any third party.
4.6 Litigation. There are no pending or threatened legal proceedings against the Company that would have a Material Adverse Effect.
4.7 Compliance. The Company is in compliance with all applicable laws, regulations, and permits necessary for the conduct of its business.
5. INVESTOR REPRESENTATIONS
5.1 Accredited Investor. The Investor represents that they are an "accredited investor" as defined in Rule 501 of Regulation D under the Securities Act of 1933.
5.2 Investment Intent. The Investor is acquiring the Shares for investment purposes and not with a view to distribution or resale.
5.3 Risk Acknowledgment. The Investor acknowledges that the investment involves substantial risk and that they may lose their entire Investment Amount.
6. CONDITIONS PRECEDENT TO CLOSING
6.1 The obligations of the Investor at the Closing are subject to: (a) accuracy of Company representations and warranties; (b) completion of satisfactory due diligence; (c) execution of all transaction documents; (d) receipt of all required corporate approvals; (e) no Material Adverse Effect having occurred.
7. VESTING AND FOUNDER RESTRICTIONS
7.1 Founder Vesting. Each founder's shares shall be subject to a [4]-year vesting schedule with a [1]-year cliff, pursuant to a separate Restricted Stock Agreement.
7.2 Non-Competition. During their employment and for [12/18/24] months thereafter, founders shall not engage in any business that directly competes with the Company.
8. CONFIDENTIALITY
8.1 Each Party agrees to keep confidential all non-public information received from the other Party in connection with this Agreement and the investment contemplated hereby.
8.2 This obligation shall survive for a period of [3/5] years following the Closing or termination of this Agreement.
9. GOVERNING LAW
9.1 This Agreement shall be governed by and construed in accordance with the laws of the State of [State/Jurisdiction], without regard to its conflict of law provisions.
9.2 Any disputes arising under or in connection with this Agreement shall be resolved in the courts of [County/City], [State], and each Party consents to the exclusive jurisdiction thereof.
10. SEVERABILITY
10.1 If any provision of this Agreement is held to be invalid, illegal, or unenforceable, the remaining provisions shall continue in full force and effect.
10.2 Any invalid provision shall be modified to the minimum extent necessary to make it valid while preserving the Parties' original intent.
11. ENTIRE AGREEMENT
11.1 This Agreement constitutes the entire agreement between the Parties concerning its subject matter and supersedes all prior agreements, understandings, negotiations, and discussions, whether oral or written.
11.2 No amendment or modification of this Agreement shall be valid unless made in writing and signed by both Parties.
12. NOTICES
12.1 All notices required under this Agreement shall be in writing and delivered by: (a) personal delivery; (b) certified mail, return receipt requested; or (c) nationally recognized overnight courier, addressed to the respective Party at the address set forth above.
12.2 Notices shall be deemed received upon: (a) personal delivery; (b) three (3) business days after mailing; or (c) one (1) business day after deposit with overnight courier.
13. FORCE MAJEURE
13.1 Neither Party shall be liable for failure to perform its obligations if such failure results from circumstances beyond its reasonable control, including but not limited to acts of God, natural disasters, war, terrorism, pandemics, government actions, or failures of third-party telecommunications or power supply.
DISCLAIMER: This template is provided for informational purposes only and does not constitute legal advice. Parties should consult with qualified legal counsel before executing this agreement.
SIGNATURES
[PARTY A / FIRST PARTY]:
Signature: _________________________
Name: [Full Name]
Title: [Title]
Date: __________
[PARTY B / SECOND PARTY]:
Signature: _________________________
Name: [Full Name]
Title: [Title]
Date: __________
