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A Pre-seed Angel investment agreement sets out the terms when an early-stage investor (angel) puts money into a startup before its first major funding round. It's typically used by Australian founders seeking their first external capital, often between $50,000 and $250,000.

This agreement covers key points like company valuation, investor rights, and ownership stakes while following ASIC guidelines for early-stage investments. It's simpler than later-stage venture capital deals but still protects both parties - giving angels basic shareholder protections while letting founders maintain control as they build their business.

Use a Pre-seed Angel investment agreement when your startup needs its first significant capital injection but isn't ready for formal venture capital. This typically happens when you've moved beyond friends and family funding but need $50,000-$250,000 to reach key milestones or prove your business model.

The agreement becomes essential once you've found an angel investor ready to commit. It protects both parties under Australian securities law while keeping things simpler than full VC documentation. Having this agreement in place helps establish clear expectations about equity, voting rights, and future funding rounds - critical foundations for your startup's growth.

• Simple SAFE Agreement: Most basic version focused on equity rights and valuation cap, ideal for quick deals under $100,000
• Full Pre-seed Agreement: Comprehensive version with detailed investor protections, board rights, and anti-dilution provisions
• Convertible Note Structure: Debt-based format that converts to equity, popular for deals between $100,000-$250,000
• Accelerator-Style Agreement: Streamlined version commonly used by startup accelerators, with standardised terms
• Syndicate Agreement: Structured for multiple angels investing together, with lead investor provisions

• Startup Founders: Usually first-time entrepreneurs seeking capital to grow their early-stage business, responsible for negotiating terms and implementing investor requirements
• Angel Investors: High-net-worth individuals providing initial capital, typically experienced business people who also offer mentorship and industry connections
• Startup Lawyers: Specialist solicitors who draft and review the agreements, ensuring ASIC compliance and protecting both parties' interests
• Company Directors: Board members who must approve and oversee the investment terms
• Company Secretary: Maintains corporate records and handles ASIC notifications related to new share issues

• Company Details: Gather current shareholding structure, company constitution, and ASIC registration details
• Valuation Data: Document your startup's current valuation method and supporting financial projections
• Investment Terms: Define the investment amount, equity percentage, and any specific rights or restrictions
• Due Diligence: Prepare key business documents, intellectual property records, and material contracts
• Stakeholder Input: Confirm agreement from existing shareholders and board members on new investor terms
• Compliance Check: Review ASIC requirements for share issuance and investor qualification rules

• Investment Terms: Clear specification of investment amount, valuation, and equity percentage being offered
• Share Rights: Detailed description of share class, voting rights, and dividend entitlements
• Anti-dilution: Protection mechanisms for future funding rounds and share issues
• Information Rights: Investor's access to financial reports and company updates
• Pre-emptive Rights: First right of refusal on future share issues
• Exit Provisions: Terms covering company sale, IPO, or liquidation scenarios
• Confidentiality: Protection of sensitive business information and intellectual property

A Pre-seed Angel investment agreement differs significantly from a Seed investment agreement in several key aspects, though they're often confused. The main distinction lies in timing, investment size, and complexity of terms.

• Investment Stage: Pre-seed agreements typically cover the first external investment ($50K-$250K) before product-market fit, while seed agreements handle larger rounds ($250K-$2M) with proven traction
• Documentation Complexity: Pre-seed agreements are deliberately simpler, focusing on basic rights and valuations. Seed agreements include more sophisticated investor protections and governance provisions
• Investor Requirements: Angel agreements usually involve individual investors offering mentorship, while seed agreements often include professional investors or early-stage VCs with more formal reporting requirements
• Future Funding Impact: Pre-seed terms are designed to be flexible for future rounds, whereas seed agreements often set precedents for subsequent VC investments