Equity Investor Agreement

Proposal Kit has helped our company create professional contracts, which in turn has expanded our customer base. Once we have entered our customers` data, it is so easy to create pre-contract agreements and all the other documents/contracts that our company needs. Suppose the founders of Magnificent Puzzles decided to turn their small business into an international chain and they are looking for $500,000 in equity investments. The company was valued at $2 million. Venture capital firm Equity Excitement decides to invest $250,000, which means they will earn 12.5 percent of equity in magnificent puzzles. In the future, when the value of Magnificent puzzles doubles, the value of Equity Excitement`s initial investment will have doubled. Equity Excitement`s investment is now worth $US 500,000. Investment A should indicate whether the remuneration is 100% equity or a combination of both. The exact conditions of a SAFE vary. However, the basic mechanism[1] is that the investor provides specific financing to the company when it is signed. In return, the investor will subsequently receive shares of the company related to certain contractual liquidity events. The primary trigger is usually the sale of preferred shares by the company, typically as part of a future price increase cycle. Unlike a direct share purchase, shares are not valued at the time of signing the SAFE.

Instead, investors and the company negotiate the mechanism by which future shares will be issued and postpone the actual valuation. These conditions typically include an entity valuation cap and/or a discount on the valuation of the shares at the time of the triggering event. In this way, the SAFE investor is insequential in the upward trend of the company between the date of signature of the SAFE (and the financing provided) and the trigger. Equity fundraising can be the most sensible. In other circumstances, this is the only realistic option for a company. Some of these situations include: an agreement (the "Equity Agreement") between Acadia Partners, L.P., Haas Wheat Advisory Partners Incorporated and Keystone, Inc. In the initial phase of fundraising, you determine a specific valuation of your business. In other words, you will decide the value of your business at this point. Depending on the valuation of your business and the amount of money an investor gives to your business, they will own a percentage of shares. Once your business goes public or sells, you will receive compensation in the same ratio you invested in. A SAFE (Simple Future Equity Agreement) is an agreement between an investor and an entity that grants the investor rights for future capital to the company similar to a warrant, unless, without determining a specific price per share at the time of the initial investment. The SAFE investor receives the futures shares in the event of a price-driven investment cycle or liquidity event.

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