Company, shareholder and founding instruments · 05
Subscription and investment agreement
Brings new money into the company on terms that survive the next round.
Brings new money into the company on terms that survive the next round.
The subscription amount, the instrument and the resulting cap table; conditions precedent and the completion mechanics; warranties by the company and by the founders, with a disclosure schedule and limitation; use of proceeds; information and reporting rights; board and observer appointment; anti-dilution; liquidation preference; and the founders’ vesting and restraint.
A subscription cannot issue shares the MOI does not authorise, and the board’s authority to issue under section 38 must exist before completion — a round that closes on unauthorised shares has to be unwound. Watch also for a liquidation preference described in the term sheet but not carried into the MOI share terms: preferences live in the MOI, not in the agreement.
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