The Pre-Seed round is the first serious stage of startup funding, where an idea receives financial support from so-called "angel" investors, friends, family, or early-stage funds. Properly preparing documentation at this stage is critical, as it lays the foundation for the company's future capital structure (Cap Table). Improperly structured investment can lead to excessive founder dilution in the future or hinder the entry of major venture investors in subsequent rounds. Specialists on the Legal.ge platform help ensure that your first investment is legally sound, protects your interests as a founder, and is attractive to investors.
What Does Pre-Seed Round Documentation Cover?
Legal.ge lawyers provide full legal support for the investment process, which includes:
- Preparation of Term Sheet: A non-binding document summarizing key investment terms: Valuation, investment amount, equity stake, and governance rights. This is the main negotiation tool.
- Investment Agreement: The primary legal document regulating the conditions for transferring shares in exchange for money, Warranties, and party liabilities.
- Updating Shareholders' Agreement (SHA): The entry of a new investor requires modifying the existing agreement to reflect the new partner's rights (e.g., information rights, veto rights on certain issues).
- Cap Table Management: Lawyers will help you correctly calculate how percentage stakes will change after the investment and how this will affect future rounds.
- Corporate Resolutions: Preparation of minutes and resolutions of the partners' meeting, necessary to register capital increases and the issuance of new shares.