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A Pre-seed Angel investment agreement lets early-stage Saudi startups secure their first round of funding from individual investors, typically before venture capital involvement. This binding contract outlines how much money the angel investor will provide, what percentage of company ownership they'll receive, and their rights as minority shareholders under Saudi Arabia's Companies Law.

Beyond just the investment terms, these agreements protect both parties by clearly defining key obligations, including Shariah-compliant profit-sharing mechanisms, board representation rights, and exit strategies. The Capital Market Authority (CMA) requires specific disclosures and documentation for such private placements, making professional legal guidance essential for compliance.

Use a Pre-seed Angel investment agreement when your Saudi startup needs its first significant capital injection before seeking larger venture funding rounds. This document becomes essential once you've identified potential angel investors and need to formalize investment terms while protecting both parties' interests under Saudi law.

The timing is crucial - implement this agreement before accepting any investment funds or making promises about equity stakes. It's particularly important for technology startups and innovative businesses operating under the Saudi Vision 2030 framework, where early-stage funding needs to align with both Shariah principles and the Kingdom's entrepreneurship regulations.

• Standard Equity Agreement: Most common type offering direct company ownership, following Saudi CMA guidelines for private placements and Shariah-compliant profit sharing
• Convertible Note Agreement: Structures investment as a loan that converts to equity at future funding rounds, popular with tech startups under Vision 2030
• SAFE Agreement (Simple Agreement for Future Equity): Simplified version offering standardized terms, increasingly used in Saudi's emerging startup ecosystem
• Milestone-Based Agreement: Links investment tranches to specific company achievements, common in innovative technology and research-driven startups

• Startup Founders: Draft and negotiate these agreements to secure early funding while maintaining control of their companies under Saudi corporate law
• Angel Investors: High-net-worth individuals who review and sign these agreements to protect their investments and define their rights as minority shareholders
• Legal Counsel: Ensure compliance with CMA regulations and Shariah principles while drafting or reviewing agreement terms
• Corporate Advisors: Guide both parties through valuation, term negotiation, and alignment with Saudi Vision 2030 startup initiatives
• Company Secretary: Maintains official documentation and ensures proper filing with relevant Saudi authorities

• Company Details: Gather complete registration documents, commercial license, and shareholder information from the Ministry of Commerce
• Investment Terms: Document the precise investment amount, equity percentage, and any Shariah-compliant profit-sharing arrangements
• Due Diligence: Compile financial statements, business plan, and market valuation aligned with CMA guidelines
• Governance Structure: Define board composition, voting rights, and decision-making processes under Saudi corporate law
• Exit Strategy: Outline clear terms for future funding rounds, share transfers, and potential acquisition scenarios
• Compliance Check: Verify alignment with Vision 2030 startup regulations and local investment laws

• Parties & Purpose: Full legal names, contact details, and clear statement of Shariah-compliant investment intent
• Investment Terms: Precise amount, payment schedule, and equity percentage following CMA guidelines
• Shareholder Rights: Voting powers, profit distribution mechanism, and board representation rules
• Anti-dilution Protection: Safeguards for investor ownership during future funding rounds
• Information Rights: Access to financial reports and company updates as per Saudi corporate governance
• Exit Provisions: Clear mechanisms for share transfers, tag-along rights, and dispute resolution
• Governing Law: Explicit reference to Saudi law and CMA regulations as controlling authority

Pre-seed Angel investment agreements differ significantly from Seed investment agreement in several key aspects under Saudi law. While both facilitate startup funding, they serve different stages and requirements in the investment cycle.

• Investment Stage: Pre-seed agreements handle very early funding from individual angels, often before product launch, while seed agreements manage larger, more structured investments from institutional investors
• Documentation Requirements: Pre-seed agreements typically have simpler terms and fewer CMA compliance requirements, whereas seed agreements need more extensive due diligence and regulatory documentation
• Valuation Approach: Pre-seed deals often use basic valuation methods with flexible terms, while seed rounds require detailed financial projections and stricter Shariah-compliant structuring
• Investor Rights: Pre-seed agreements usually grant limited control rights, but seed agreements commonly include more sophisticated governance provisions and protective clauses