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Fundraising Agreement

This template outlines the terms and conditions between a company seeking investment and an investor providing funds. It is used to formalize the agreement for fundraising rounds, ensuring clarity on equity, valuation, and investor rights.

Updated 17d ago
fundraisinginvestmentequityagreementfinancingstartupSMESouthern Africa

Company Letterhead

{{company_name}}

{{company_address}}

Phone: {{phone}}

Email: {{email}}

Website: {{website}}

Parties to the Agreement

This Fundraising Agreement ("Agreement") is made and entered into effective as of {{effective_date}} (the "Effective Date"), by and between:

1. {{company_name}}, a company duly incorporated and existing under the laws of {{country_of_incorporation}}, with its registered office at {{company_address}} (hereinafter referred to as the "Company").

AND

2. {{investor_name}}, residing at/with its principal place of business at {{investor_address}} (hereinafter referred to as the "Investor").

The Company and the Investor are hereinafter collectively referred to as the "Parties" and individually as a "Party".

Recitals

WHEREAS, the Company is engaged in the business of {{company_business_description}}.

WHEREAS, the Company desires to raise capital for {{purpose_of_funding}}.

WHEREAS, the Investor desires to invest in the Company on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Parties agree as follows:

Investment Details

3.1. Investment Amount: The Investor agrees to invest the sum of {{investment_currency}} {{investment_amount}} ({{investment_amount_words}}) into the Company (the "Investment Amount").

3.2. Form of Investment: The Investment Amount shall be provided in exchange for {{equity_percentage}}% of the fully diluted equity of the Company / {{number_of_shares}} ordinary shares in the Company / a convertible loan note as per Schedule A.

3.3. Valuation: The pre-money valuation of the Company is agreed to be {{valuation_currency}} {{pre_money_valuation}}.

3.4. Use of Funds: The Company agrees to apply the Investment Amount primarily for {{intended_use_of_funds}}.

Representations and Warranties

4.1. Company Representations and Warranties: The Company represents and warrants to the Investor that:

(a) It is duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation.

(b) It has the power and authority to enter into and perform its obligations under this Agreement.

(c) The execution and delivery of this Agreement will not conflict with its constitutive documents or any other agreement to which it is a party.

(d) All financial information provided to the Investor is true and accurate in all material respects.

4.2. Investor Representations and Warranties: The Investor represents and warrants to the Company that:

(a) It has the power and authority to enter into and perform its obligations under this Agreement.

(b) It is acquiring the shares/interest for investment purposes and not with a view to resale or distribution.

(c) It has conducted its own due diligence and is satisfied with the information provided by the Company.

Covenants

5.1. Information Rights: The Company agrees to provide the Investor with {{reporting_frequency}} financial reports and other material information as reasonably requested by the Investor.

5.2. Board Representation: The Investor shall have the right to appoint {{number_of_board_seats}} director(s) to the Company's board of directors / attend board meetings as an observer.

5.3. Future Financing: In the event of future fundraising rounds, the Investor shall have a pro-rata right to participate to maintain its ownership percentage.

5.4. Exclusivity: The Company agrees not to solicit or accept other investment offers for a period of {{exclusivity_period}} days from the Effective Date.

Confidentiality

6.1. Both Parties agree to keep confidential all non-public information disclosed by the other Party in connection with this Agreement and the investment, for a period of {{confidentiality_period}} years from the Effective Date.

6.2. This obligation of confidentiality shall not apply to information that is publicly available, independently developed, or required to be disclosed by law.

Governing Law and Dispute Resolution

7.1. Governing Law: This Agreement shall be governed by and construed in accordance with the laws of {{governing_law_country}}.

7.2. Dispute Resolution: Any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the rules of {{arbitration_institution}} in {{arbitration_city}}, {{arbitration_country}}.

7.3. The language of the arbitration shall be English.

Termination

8.1. This Agreement may be terminated by mutual written agreement of the Parties.

8.2. Either Party may terminate this Agreement upon a material breach by the other Party, provided that the breaching Party fails to cure such breach within {{cure_period}} days of receiving written notice thereof.

Miscellaneous

9.1. Entire Agreement: This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether written or oral.

9.2. Amendments: No amendment or modification of this Agreement shall be valid unless in writing and signed by both Parties.

9.3. Assignment: Neither Party may assign its rights or obligations under this Agreement without the prior written consent of the other Party.

9.4. Severability: If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.

Signature Block

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

FOR THE COMPANY:

___________________________

Name: {{company_signatory_name}}

Title: {{company_signatory_title}}

Date: {{company_signature_date}}

FOR THE INVESTOR:

___________________________

Name: {{investor_signatory_name}}

Title: {{investor_signatory_title}}

Date: {{investor_signature_date}}

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