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Seed investment agreement
I need a seed investment agreement for an early-stage tech startup seeking 鈧100,000 in exchange for 10% equity, with provisions for investor rights, anti-dilution protection, and a board observer seat. The agreement should also outline the use of funds, founder vesting schedules, and a right of first refusal for future funding rounds.
What is a Seed investment agreement?
A Seed investment agreement sets out the terms when early-stage investors put money into an Irish startup in exchange for shares. It's typically the first formal investment round, where business angels or seed funds invest anywhere from 鈧50,000 to 鈧500,000 to help get the company off the ground.
The agreement covers critical details like company valuation, investor rights, and share class structure under Irish company law. It usually includes provisions for future funding rounds, board representation, and reporting requirements. Most Irish startups use standardized templates from Enterprise Ireland or major law firms to keep costs down while ensuring proper legal protection for all parties.
When should you use a Seed investment agreement?
Use a Seed investment agreement when your Irish startup needs its first significant external funding, typically between 鈧50,000 and 鈧500,000. This agreement becomes essential once you've moved beyond family-and-friends funding and are ready to bring in professional investors like business angels or seed funds.
The timing is crucial - put this agreement in place before accepting any investment money or issuing shares. It protects both founders and investors by clearly documenting ownership stakes, voting rights, and future funding arrangements. For Irish startups, having this agreement ready often makes the difference between securing investment and missing out on vital early-stage capital.
What are the different types of Seed investment agreement?
- Basic agreements use Enterprise Ireland's standard template, covering essential terms like valuation, share class, and voting rights
- Convertible loan note agreements let investors convert their loan into shares at a future funding round, popular with Irish angel investors
- Simple Agreement for Future Equity (SAFE) offers a streamlined approach without setting an immediate valuation
- Full subscription agreements include detailed investor protections and warranties, common for larger seed rounds
- Accelerator-specific agreements modify standard terms to match specific program requirements and timeline milestones
Who should typically use a Seed investment agreement?
- Startup Founders: Sign the Seed investment agreement as company directors, often holding majority shares pre-investment
- Angel Investors: High-net-worth individuals who provide capital in exchange for equity, typically investing 鈧50,000-鈧250,000
- Seed Funds: Professional investment firms specializing in early-stage Irish companies, often leading investment rounds
- Corporate Lawyers: Draft and review agreements to ensure compliance with Irish company law and protect all parties' interests
- Enterprise Ireland: Often involved as a co-investor, providing matching funds and standardized agreement templates
How do you write a Seed investment agreement?
- Company Details: Gather current shareholding structure, company valuation, and certificate of incorporation
- Investment Terms: Define investment amount, share price, and type of shares being issued
- Due Diligence: Prepare financial statements, business plan, and existing contracts for investor review
- Investor Rights: Outline board representation, voting rights, and information access privileges
- Future Rounds: Include pre-emption rights and anti-dilution provisions for subsequent funding
- Documentation: Use our platform to generate a legally-sound agreement that includes all required elements under Irish law
What should be included in a Seed investment agreement?
- Parties & Shares: Full legal names, company details, and share class specifications
- Investment Terms: Precise investment amount, share price, and completion mechanics
- Warranties: Standard company and founder warranties under Irish law
- Investor Rights: Board appointment rights, information rights, and consent matters
- Share Transfer Rules: Pre-emption rights, drag-along and tag-along provisions
- Exit Provisions: Terms for company sale, IPO, or winding up
- Governing Law: Explicit statement of Irish law jurisdiction and dispute resolution
What's the difference between a Seed investment agreement and a Pre-seed Angel investment agreement?
A Seed investment agreement differs significantly from a Pre-seed Angel investment agreement in several key aspects, though both are used for early-stage funding in Irish startups. Understanding these differences helps you choose the right agreement for your funding stage.
- Investment Size: Seed rounds typically involve 鈧50,000-鈧500,000 from professional investors, while pre-seed deals are usually smaller (鈧10,000-鈧50,000) from individual angels
- Documentation Complexity: Seed agreements include more comprehensive investor protections, detailed warranties, and governance provisions; pre-seed agreements are generally simpler
- Investor Rights: Seed agreements often include board seats and veto rights; pre-seed typically offers basic information rights only
- Future Funding Impact: Seed terms set important precedents for later rounds, while pre-seed terms are often modified in subsequent investments
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