Pre-seed Angel investment agreement Template for Pakistan

A Pre-seed Angel investment agreement helps Pakistani startups secure their first round of outside funding from individual investors, typically between PKR 1-5 million. It lays out how much money the angel investor will provide, what percentage of company ownership they'll receive, and key terms like board rights and future funding options.

Under Pakistan's Companies Act 2017, these agreements protect both founders and investors by clearly defining valuation methods, investment timelines, and reporting requirements. Startup founders often use these contracts to maintain control while giving angels enough security to take an early bet on their company, making them essential tools in Pakistan's growing tech ecosystem.

Use a Pre-seed Angel investment agreement when your Pakistani startup needs its first external funding round, typically before seeking larger venture capital investments. This agreement becomes essential once you've found an angel investor willing to invest between PKR 1-5 million and need to formalize the terms of their investment.

The timing is crucial when you're ready to exchange equity for capital but want to maintain operational control. It's particularly valuable for tech startups in Pakistan's major cities who need quick capital deployment while following SECP guidelines. Use it before accepting any money or making verbal promises about equity stakes to protect both parties and establish clear governance structures.

• Standard Equity Agreement: Most common type offering straight equity for capital, with basic voting rights and board representation clauses suitable for tech startups
• Convertible Note Agreement: Allows investment to convert to equity at a later valuation, popular among Karachi and Lahore-based startups needing quick capital
• SAFE Agreement: Simplified agreement for future equity, gaining popularity in Pakistan's startup ecosystem, especially for rapid deals under PKR 2 million
• Milestone-Based Agreement: Structures investment in tranches tied to specific company achievements, common in regulated sectors
• Hybrid Agreement: Combines elements of equity and convertible notes, often used when dealing with multiple angel investors

• Angel Investors: High-net-worth individuals or small investment groups providing initial capital, typically PKR 1-5 million, in exchange for equity
• Startup Founders: Entrepreneurs seeking early-stage funding who negotiate terms and maintain company control while offering ownership stakes
• Corporate Lawyers: Draft and review agreements to ensure compliance with SECP regulations and protect both parties' interests
• Financial Advisors: Help structure deal terms, determine valuation, and advise on investment implications
• Company Secretary: Handles documentation, regulatory filings, and maintains corporate records of the investment

• Company Details: Gather business registration documents, SECP incorporation certificate, and updated shareholding structure
• Investment Terms: Define investment amount, equity percentage, valuation basis, and any specific milestones or conditions
• Investor Information: Collect investor's KYC documents, tax records, and proof of funds as per Pakistani banking regulations
• Rights Package: Outline voting rights, board representation, anti-dilution provisions, and exit mechanisms
• Future Rounds: Specify terms for follow-on investments and right of first refusal for future funding rounds
• Documentation: Use our platform to generate a compliant agreement that includes all essential elements under Pakistani law

• Investment Terms: Clear statement of investment amount, equity percentage, and company valuation following SECP guidelines
• Parties & Capacity: Complete legal names, addresses, and proof of authority to enter agreement under Pakistani law
• Rights & Obligations: Detailed outline of voting rights, board seats, information access, and pre-emptive rights
• Transfer Restrictions: Lock-in period, right of first refusal, and tag-along/drag-along rights
• Exit Mechanisms: Terms for future rounds, IPO provisions, and buyout procedures
• Governing Law: Explicit statement of Pakistani jurisdiction and dispute resolution process
• Execution Details: Signature blocks, witness requirements, and company seal placement

A Pre-seed Angel investment agreement differs significantly from a Seed investment agreement in several key aspects, though both deal with early-stage startup funding in Pakistan. The main distinctions reflect their different stages in the startup funding lifecycle and legal requirements under SECP guidelines.

• Investment Size: Pre-seed agreements typically handle smaller amounts (PKR 1-5 million) from individual angels, while seed agreements manage larger investments (PKR 10-50 million) often from institutional investors
• Legal Complexity: Pre-seed agreements are simpler, focusing on basic equity and voting rights, while seed agreements include more sophisticated terms like liquidation preferences and anti-dilution provisions
• Investor Rights: Pre-seed agreements offer limited control rights, whereas seed agreements generally include broader investor protections and governance roles
• Documentation Requirements: Pre-seed agreements need basic SECP compliance, while seed agreements require more extensive due diligence and regulatory documentation