This agreement is for use when a company wishes to issue shares to a new investor. It sets out the mechanics for the investment and the warranties to be given by the company. This is a simple subscription agreement, intended for use when a company is raising capital from friends and family type seed investors. It provides for investment for ordinary shares in the company in one tranche, with no conditions.
There are no standard terms that apply to investment by seed investors – these types of investments can often be relatively informal and may not include the investor protection provisions required by professional investors or formal investment groups, such as angel groups.
Under New Zealand securities legislation, a company may not issue (or offer to issue) shares, options or other securities without providing detailed disclosure information to the new shareholders unless it is satisfied that an exclusion to the information disclosure requirements of the Financial Markets Conduct Act 2013 applies in relation to that offer or issue. Please see our NZ securities law – tech company capital raising guide for an explanation of the relevant exclusions.
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