Pre-seed Angel investment agreement Generator for Hong Kong

A Pre-seed Angel investment agreement sets out the terms when an early-stage investor puts money into a startup before its first major funding round. These deals typically happen when Hong Kong entrepreneurs are still developing their initial business concept or prototype, with angels investing anywhere from HK$100,000 to HK$2 million.

The agreement covers key points like company valuation, investment amount, share class rights, and founder commitments. Under Hong Kong securities laws, these private deals must include proper risk disclosures and comply with the Companies Ordinance, while offering both sides protection through clear exit terms and anti-dilution provisions.

Use a Pre-seed Angel investment agreement when you're ready to accept your first external funding but haven't yet launched a formal seed round. This typically happens during your startup's earliest stages in Hong Kong - often when you have a working prototype or MVP but need capital to refine it before approaching venture capital firms.

The timing is crucial: you need this agreement before accepting any money from angel investors, even small amounts from friends and family. It establishes clear ownership stakes, protects both parties under Hong Kong securities law, and creates a foundation for future funding rounds. Getting it right early prevents messy ownership disputes and regulatory issues later.

• Simple Agreement: The most basic version using standardized terms and straightforward equity allocation - ideal for friends and family rounds under HK$500,000
• Convertible Note Structure: Treats the investment as a loan that converts to equity later, with specific trigger events and valuation caps
• SAFE Agreement: Popular among tech startups, offering simplified terms with future equity rights but fewer immediate protections
• Full Subscription Agreement: Comprehensive version with detailed rights, warranties, and governance terms - typically used for larger pre-seed rounds above HK$1 million
• Bridge Investment Structure: Short-term funding agreement designed to convert during the next qualified financing round

• Startup Founders: Usually tech entrepreneurs or early-stage business owners seeking their first external investment to develop products or services
• Angel Investors: High-net-worth individuals, often successful entrepreneurs themselves, who provide capital in exchange for equity
• Corporate Lawyers: Draft and review agreements to ensure compliance with Hong Kong securities laws and protect both parties' interests
• Company Secretary: Handles filing requirements and maintains records of share transfers and ownership changes
• Financial Advisors: Help structure deals and determine fair valuation terms for both founders and investors

• Company Details: Gather business registration documents, current cap table, and financial statements showing company assets and liabilities
• Investment Terms: Define investment amount, valuation, share class, and any special rights or restrictions
• Due Diligence: Prepare key business metrics, growth projections, and product development roadmap
• Founder Information: Collect founders' backgrounds, roles, and commitments to the business
• Investor Profile: Document investor's accreditation status under Hong Kong securities laws and investment experience
• Exit Strategy: Outline potential exit scenarios, tag-along rights, and future funding plans

• Parties and Recitals: Full legal names, addresses, and business registration details of startup and investor
• Investment Terms: Precise amount, valuation, share class, and payment mechanism details
• Warranties: Company's business condition, ownership structure, and intellectual property rights
• Share Rights: Voting powers, dividend rights, and anti-dilution protections
• Transfer Restrictions: Right of first refusal, drag-along and tag-along provisions
• Governing Law: Explicit statement of Hong Kong jurisdiction and dispute resolution process
• Execution Block: Signature requirements under Hong Kong Companies Ordinance

A Pre-seed Angel investment agreement differs significantly from a Seed investment agreement in several key aspects, though both handle early-stage funding. Understanding these differences helps you choose the right agreement for your startup's current stage.

• Investment Size: Pre-seed deals typically range from HK$100,000 to HK$2 million, while seed rounds usually start at HK$2 million and can exceed HK$10 million
• Documentation Complexity: Pre-seed agreements are usually simpler, with basic terms and protections, while seed agreements require more detailed provisions and investor rights
• Investor Profile: Pre-seed typically involves individual angels making personal decisions, while seed rounds often include professional investors or small VC firms
• Company Stage: Pre-seed deals happen during concept or prototype phase, while seed funding requires some market validation or early revenue
• Due Diligence Requirements: Pre-seed involves basic company checks, while seed rounds demand comprehensive financial and legal due diligence