Description
An Equity Investment Agreement is a definitive legal contract through which an investor provides capital to a company in exchange for ownership shares. It defines the terms under which equity is issued, outlines rights and responsibilities of both parties, and lays the groundwork for corporate governance, exit strategy, and return on investment.
The agreement includes provisions such as investment amount, type of shares issued (common or preferred), share price, voting rights, liquidation preferences, dividend rights, anti-dilution protection, board composition, and exit clauses. It also includes representations and warranties from the company, use-of-funds clauses, investor rights to inspect financial records, and provisions for future fundraising rounds.
This contract may be part of a broader deal structure that includes a Shareholders’ Agreement and a Subscription Agreement. For early-stage startups, it provides formal legal backing to investor commitments and sets a foundation for future rounds.
For investors, the agreement ensures that their investment is safeguarded through governance rights, information rights, and legal protections in the event of liquidation or acquisition. For the company, it ensures legal compliance, capital infusion, and the potential to leverage investor expertise and networks.
Used across various stages—from seed to growth equity—the Equity Investment Agreement is a core element of startup fundraising, venture capital, and private equity transactions.
Olayinka –
This agreement made my first equity deal feel much more secure. Everything from valuation to voting rights was clearly covered—great resource for angel investors.
Sidi –
This contract gave us confidence during negotiations. It helped us secure funding while ensuring our long-term vision and control stayed protected.
Naziru –
A solid, well-drafted agreement. It includes the key clauses we look for—liquidation preferences, dilution protection, and board representation.
Seun –
I recommend this template to clients launching new ventures. It’s flexible, easy to customize, and reduces the need for costly legal drafting from scratch.
Franklin –
We used this equity investment agreement to formalize a seed round. It helped us build trust with investors and protect our ownership structure from the start.