Subscription Agreement: start-up business multiple investors

Subscription Agreement: start-up business multiple investors

Subscription agreement for the investment in a start-up business by multiple investors

Background

When use a separate Subscription Agreement?

Having a separate Investment/Subscription Agreement is likely to be more suitable for a company:

• which already has non-management shareholders or investors, perhaps as a result of a previous investment round
• which anticipates having future funding rounds

About this Subscription Agreement

This document is for the investment by multiple investors in a start-up private limited company. It covers the investment terms for the subscription and includes warranties from the company and the founder shareholders.

In addition to this Subscription Agreement, the parties will likely require a shareholders agreement between the investors and the founders of the company which governs the relationship between the company and all of its shareholders going forward.

Document features

Features include:

• subscription: the mechanism and terms for the subscription for shares by the investors
• completion: completion of the investment, including the issue of shares to the investors and payment by the investors
• warranties: warranties from the company and each founder. As the investment is in a start-up company, the warranties reflect the limited trading history of the company
• limitations on liability: legal limitations on the potential liability under the warranties of the company and the founders

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