This is the Angel Seedsummit version, typically used for smaller rounds, for Angels, and within the UK, for those seeking S/EIS tax relief. Both of these are written for use within England & Wales, but they can be the basis for modification for use in your location.
SUMMARY OF TERMS FOR
SALE OF SERIES SEED ORDINARY SHARES
[Founder 1], [Founder 2], & [Founder 3]
[Lead Investor] (the "Lead Investor") in conjunction with other investors (the
"Investors") mutually agreeable to the Lead Investor and the Company.
Structure of Financing
The financing will be up to an aggregate of [___] at a fully diluted pre-
money valuation of [___], including an unallocated employee share option
plan ("ESOP") of [ ]%. The Lead Investor will invest up to [___] and
would hold no less than [___]% of the Company on a fully diluted basis.
Note, DELETE on execution version: Each investor is limited to 100,000
in SEIS investment per year. Aggregate SEIS-qualified investment in a
company cannot exceed 150,000 in any three-year period. Accordingly,
should the aggregate amount of SEIS-seeking investment exceed 150,000,
the SEIS-qualified amount for each SEIS investor shall be pro-rated based
on his/her investment relative to the round. Two classes of ordinary shares
will be issued, one for SEIS investment and the other for non-SEIS
investment. For example, if Investor A is investing 50,000 in a 200,000
and all investors seek SEIS, Investor A will receive 37,500 (or 25% of the
eligible 150k) of SEIS shares and the balance, 12,500, in non-SEIS
shares. Any division should be included in the term sheet.
Conditions to Close
(i) completion of confirmatory due diligence and anti-money laundering
checks (ii) all employees having entered into service agreements containing
IP assignment provisions (iii) receipt of all necessary consents [and iv)
incorporation or re-incorporation in England.]
Estimated Closing Date
Type of Security
Ordinary Shares [to be issued in two series if EIS qualification is sought].
If requested, the Company will seek to qualify the investment under the
Enterprise Investment Scheme.
[Priority Payment on Exit]
[Option 1: If S/EIS not enacted or