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A Seed investment agreement spells out the terms when early-stage investors put money into a Pakistani startup in exchange for equity. It covers how much funding the startup gets, what percentage of ownership investors receive, and key rights like board seats or veto powers over major decisions.

Under Pakistani company law, these agreements must detail valuation methods, protect minority shareholder rights, and specify how future funding rounds will work. They typically include anti-dilution provisions, information rights, and exit strategies - making them crucial documents for both founders and angel investors during the critical first stages of funding.

Use a Seed investment agreement when your Pakistani startup needs its first significant external funding, typically between PKR 5-50 million. This document becomes essential right before accepting money from angel investors or early-stage venture capital firms, particularly when you're moving beyond friends-and-family funding.

The timing is crucial - draft this agreement during investment negotiations but before any money changes hands. Many Pakistani founders prepare it when they've proven their concept locally, built a minimum viable product, and need capital to scale operations. Having clear terms in place protects both parties and helps avoid disputes about ownership, control, and future funding rounds.

• Basic Equity: The simplest form, offering straight shares in exchange for capital, common among Pakistani tech startups seeking initial funding
• Convertible Note: Structures the investment as a loan that converts to equity at a future funding round, popular with early-stage founders who want to delay valuation
• SAFE Agreement: A simplified version that promises future equity without debt or maturity dates, gaining traction in Pakistan's startup ecosystem
• Staged Investment: Releases funding in tranches based on meeting specific milestones, common in riskier ventures or larger seed rounds
• Hybrid Structure: Combines elements of equity and convertible instruments, often used when dealing with both local and international investors

• Startup Founders: Primary negotiators who seek capital while protecting their ownership and control rights in the company
• Angel Investors: High-net-worth individuals providing initial capital, typically PKR 5-20 million, in exchange for equity
• Corporate Lawyers: Draft and review agreements to ensure compliance with Pakistani securities laws and SECP regulations
• Investment Banks: Often facilitate deals and conduct due diligence for larger seed rounds above PKR 50 million
• Board Members: Review and approve final terms, particularly regarding governance rights and future funding provisions
• Company Secretary: Handles documentation, filing, and maintaining corporate records of the investment

• Company Details: Gather incorporation documents, SECP registration, and shareholder information
• Valuation Data: Prepare current financials, growth projections, and proposed company valuation
• Investment Terms: Define investment amount, equity percentage, and any special rights or preferences
• Governance Structure: Outline board composition, voting rights, and decision-making thresholds
• Future Rounds: Plan for anti-dilution provisions and pre-emptive rights for subsequent funding
• Exit Strategy: Document liquidity preferences and tag-along/drag-along rights
• Due Diligence: Collect intellectual property records, contracts, and compliance certificates

• Party Identification: Full legal names, addresses, and registration details of startup and investors
• Investment Terms: Precise amount, equity percentage, and payment schedule in PKR
• Share Class Details: Rights, preferences, and restrictions attached to issued shares
• Representations: Company's warranties about financial status and legal compliance
• Board Rights: Investor representation and voting thresholds per SECP guidelines
• Anti-dilution: Protection mechanisms for future funding rounds
• Exit Provisions: Tag-along rights, drag-along rights, and liquidation preferences
• Dispute Resolution: Pakistani jurisdiction clause and arbitration procedures

A Seed investment agreement differs significantly from a Pre-seed Angel investment agreement in several key aspects, though both deal with early-stage funding in Pakistan's startup ecosystem.

• Investment Size: Seed rounds typically involve PKR 5-50 million, while pre-seed deals are usually under PKR 5 million
• Documentation Complexity: Seed agreements require more detailed terms, valuation methods, and governance structures compared to simpler pre-seed documents
• Investor Rights: Seed agreements grant stronger protective provisions and board representation, while pre-seed deals often have minimal investor control rights
• Future Funding Impact: Seed agreements include detailed provisions for future rounds and exit strategies, whereas pre-seed documents focus mainly on immediate investment terms
• Regulatory Requirements: Seed investments face stricter SECP oversight and compliance requirements than pre-seed deals