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A Pre-seed Angel investment agreement represents the first formal funding deal between startup founders and early-stage investors in the UAE. It outlines how angel investors will provide initial capital—typically between AED 100,000 to 500,000—in exchange for equity before the company seeks larger venture capital rounds.

Under UAE commercial law, these agreements must specify key terms like equity percentages, valuation caps, and investor rights while complying with local shareholding requirements. The document sets clear expectations about board seats, voting rights, and exit strategies, protecting both founders and angels during this crucial early stage when companies often have little more than an idea and a prototype.

Use a Pre-seed Angel investment agreement when your UAE startup needs its first external funding round and you're ready to exchange equity for capital from individual investors. This document becomes essential once you've moved beyond friends-and-family funding but aren't yet ready for institutional venture capital.

The agreement proves particularly valuable when negotiating with multiple angel investors simultaneously, as it standardizes terms and protects both parties. UAE entrepreneurs often implement it during the proof-of-concept stage, when the company needs AED 100,000-500,000 to develop prototypes, conduct market testing, or hire initial team members.

• Simple Equity Investment: Straightforward agreements where angels receive common shares, typically used by UAE tech startups seeking under AED 250,000
• SAFE Agreement (Simple Agreement for Future Equity): Defers valuation decisions until later funding rounds, popular among Dubai-based early-stage startups
• Convertible Note Structure: Debt that converts to equity, offering interest rates and valuation caps, common in Abu Dhabi's innovation sector
• Staged Investment Agreement: Releases funds based on milestone achievements, preferred for UAE hardware startups with clear development phases

• Startup Founders: Create and sign Pre-seed Angel investment agreements when seeking initial capital, typically tech entrepreneurs from UAE free zones or mainland companies
• Angel Investors: High-net-worth individuals who provide early funding, often experienced business leaders from Dubai or Abu Dhabi
• Corporate Lawyers: Draft and review agreements to ensure compliance with UAE commercial law and protect both parties' interests
• Financial Advisors: Guide valuation discussions and structure investment terms aligned with local market standards
• Company Directors: Approve and execute agreements on behalf of the startup, ensuring proper corporate governance

• Company Details: Gather trade license, shareholder information, and corporate documents from the UAE Department of Economic Development
• Investment Terms: Define investment amount, equity percentage, and valuation cap aligned with UAE market standards
• Due Diligence: Prepare financial statements, business plan, and proof-of-concept documentation
• Governance Rights: Outline board representation, voting rights, and decision-making processes
• Exit Provisions: Specify transfer restrictions, tag-along rights, and future funding rounds parameters
• Compliance Check: Ensure agreement aligns with UAE Commercial Companies Law and free zone regulations

• Party Identification: Full legal names, Emirates ID numbers, and company details including trade license numbers
• Investment Structure: Precise equity percentage, share class, and valuation details as per UAE Companies Law
• Consideration Terms: Investment amount, payment schedule, and bank account details for fund transfers
• Warranties Section: Founder and company representations about business condition and legal compliance
• Protection Rights: Anti-dilution provisions, information rights, and pre-emptive rights
• Governing Law: Explicit reference to UAE Commercial Law and relevant free zone regulations
• Dispute Resolution: DIFC Courts jurisdiction or local arbitration procedures

A Pre-seed Angel investment agreement differs significantly from a Seed investment agreement in several key aspects, though both handle early-stage funding in the UAE startup ecosystem.

• Investment Size: Pre-seed deals typically range from AED 100,000-500,000, while seed rounds usually start at AED 1 million and can exceed AED 5 million
• Investor Profile: Pre-seed agreements focus on individual angel investors, while seed agreements often involve institutional investors or venture capital firms
• Documentation Complexity: Pre-seed agreements are generally simpler, with basic protection rights, while seed agreements include more sophisticated terms and investor protections
• Company Stage: Pre-seed deals happen at idea or prototype stage, whereas seed funding requires some market validation and early revenue
• Valuation Method: Pre-seed often uses simplified valuation caps, while seed rounds require detailed company valuations and complex pricing mechanisms