������Ƶ

A Seed investment agreement sets out the terms when early-stage investors put money into a Nigerian startup in exchange for equity. It captures key details like the investment amount, share percentage, and company valuation - typically ranging from ���2 million to ���20 million for first-round funding.

Under Nigerian corporate law, these agreements protect both founders and investors by spelling out crucial rights like board seats, veto powers on major decisions, and anti-dilution provisions. They also address important practicalities like payment schedules, reporting requirements, and what happens if the business needs future funding rounds.

Use a Seed investment agreement when your Nigerian startup is ready to accept its first round of external funding from angel investors or early-stage venture capitalists. This typically happens after you've developed a minimum viable product and need capital to scale operations, hire key staff, or expand market reach.

The timing is crucial - implement this agreement before any money changes hands, ideally when you've reached initial terms with investors but before finalizing valuation details. Nigerian Securities and Exchange Commission regulations require proper documentation of all investment transactions, making this agreement essential for protecting both parties and ensuring compliance with local startup funding laws.

• Simple Cash Investment: Most basic type for straightforward equity-for-cash deals, commonly used by Nigerian angel investors for first-time funding rounds
• Convertible Note Agreement: Offers debt that converts to equity later, popular among Lagos tech startups seeking flexible terms
• SAFE (Simple Agreement for Future Equity): Newer format gaining traction in Nigeria's startup ecosystem, especially for quick closing without valuation discussions
• Strategic Investment Agreement: Includes additional terms for corporate investors offering both capital and business support
• Syndicate Investment Agreement: Structured for multiple investors participating in the same funding round, with clear voting rights and coordination terms

• Startup Founders: Usually tech entrepreneurs or small business owners seeking capital to grow their ventures, responsible for negotiating terms and representing the company
• Angel Investors: High-net-worth individuals providing early-stage capital, often experienced entrepreneurs themselves who can offer mentorship
• Venture Capital Firms: Professional investment companies specializing in startup funding, typically investing larger amounts with more structured terms
• Corporate Lawyers: Draft and review agreements to ensure compliance with Nigerian investment laws and protect both parties' interests
• Company Secretaries: Handle documentation, filing requirements, and maintain records with Nigeria's Corporate Affairs Commission

• Company Details: Gather current company valuation, registration documents from CAC, and existing cap table showing shareholding structure
• Investment Terms: Document agreed investment amount, equity percentage, and any specific rights or restrictions
• Due Diligence: Collect financial statements, business plan, and proof of intellectual property rights
• Investor Information: Compile KYC documents, proof of funds, and investment history as required by Nigerian SEC
• Stakeholder Approval: Secure written consent from existing shareholders and board members for the new investment
• Compliance Check: Verify alignment with Nigerian Investment Promotion Commission guidelines and local startup regulations

• Investment Terms: Clear statement of investment amount, valuation, and equity percentage being offered
• Share Class Rights: Detailed description of voting rights, dividend rights, and any preferential terms
• Anti-dilution Protection: Safeguards against future share value dilution during subsequent funding rounds
• Board Representation: Terms for investor board seats and voting thresholds for key decisions
• Information Rights: Regular financial reporting requirements and access to company records
• Exit Provisions: Terms for future sales, IPOs, or company dissolution under Nigerian corporate law
• Dispute Resolution: Clear arbitration or mediation procedures following Nigerian jurisdiction

A Seed investment agreement differs significantly from a Pre-seed Angel investment agreement in several key aspects, though both are crucial for Nigerian startups seeking early funding.

• Investment Stage: Seed agreements typically involve larger amounts (���5-50 million) and more formal investors, while pre-seed deals are usually smaller (���500k-5 million) with informal angel investors
• Documentation Requirements: Seed agreements need full CAC compliance and detailed term sheets, whereas pre-seed can often work with simpler documentation
• Investor Rights: Seed agreements include comprehensive protective provisions and board seats, while pre-seed deals usually have minimal investor control rights
• Valuation Methods: Seed rounds require formal company valuation, but pre-seed often uses convertible notes or SAFE agreements to delay valuation