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A Seed investment agreement spells out the terms when early-stage investors put money into a startup company in Canada. This legal contract details how much funding the investors will provide, what percentage of company ownership they'll receive, and their rights as stakeholders.

These agreements typically come into play during a company's first formal funding round, after friends and family investments but before Series A. They protect both founders and investors by setting clear expectations about valuation, voting rights, and board representation - all while following Canadian securities regulations for private company investments.

Use a Seed investment agreement when your Canadian startup needs its first significant round of outside funding beyond friends and family investments. This agreement becomes essential once you've found investors ready to commit between $50,000 and $2 million in exchange for equity in your company.

The timing is perfect when you've developed a minimum viable product, gained some market traction, and need capital to scale operations. Having this agreement in place protects both parties by clearly defining investment terms, ownership stakes, and investor rights before money changes hands - critical steps for compliance with Canadian securities laws.

• Common Seed investment agreement variations in Canada include the Simple Agreement for Future Equity (SAFE), which offers quick closing without setting a valuation; Convertible Notes, which function as loans converting to equity; Priced Equity rounds with fixed valuations and share prices; and Industry-Specific agreements tailored to sectors like tech or biotech with unique IP provisions and regulatory compliance needs.

• Startup Founders: Create and negotiate these agreements to secure funding while protecting their ownership and control rights in the company.
• Angel Investors: Review and sign Seed investment agreements when providing early-stage capital, often between $50,000 to $250,000.
• Corporate Lawyers: Draft and review agreements to ensure compliance with Canadian securities laws and protect client interests.
• Venture Capital Firms: Participate in larger seed rounds, typically contributing $250,000 or more while requiring specific governance terms.
• Board Members: Review and approve agreements as part of their fiduciary duties to the corporation.

• Company Information: Gather corporate documents, financial statements, cap table, and existing shareholder agreements.
• Investment Terms: Define investment amount, company valuation, share price, and type of securities being offered.
• Due Diligence: Compile business plan, financial projections, and key contracts for investor review.
• Rights Package: Determine voting rights, board seats, anti-dilution protection, and information rights.
• Legal Compliance: Ensure adherence to Canadian securities regulations and provincial requirements for private placements.
• Documentation: Our platform streamlines this process by generating compliant agreements tailored to your specific needs.

• Investment Details: Precise amount, valuation, and number of shares or securities being issued.
• Rights and Preferences: Voting rights, board representation, anti-dilution protection, and information access.
• Representations: Company and investor warranties about their legal status and authority to enter the agreement.
• Share Terms: Class of shares, dividend rights, liquidation preferences, and conversion features.
• Closing Conditions: Required documents, regulatory approvals, and timing of investment tranches.
• Jurisdictional Compliance: Canadian securities law requirements and provincial regulations for private placements.
• Exit Provisions: Tag-along rights, drag-along rights, and pre-emptive rights for future rounds.

A Seed investment agreement differs significantly from an Investment agreement term sheet. While both documents relate to startup funding, they serve distinct purposes in the investment process and carry different legal weights in Canadian business law.

• Legal Binding: Seed investment agreements are fully binding contracts that finalize investment terms, while term sheets are typically non-binding preliminary documents outlining key deal points.
• Detail Level: Seed agreements contain comprehensive legal provisions, warranties, and closing conditions; term sheets offer bullet-point summaries of major terms.
• Timing: Term sheets come first as negotiation frameworks, followed by the formal Seed investment agreement once parties agree on basic terms.
• Documentation: Seed agreements require extensive supporting documents and due diligence; term sheets need minimal documentation to initiate discussions.