Investment Agreement

An Investment Agreement is a legal contract between an investor and a company (or fund) that governs the terms of an investment. It specifies the investment amount, type of securities received (equity, debt, or convertible instruments), valuation, investor rights, representations and warranties, and conditions to closing. The agreement typically addresses governance matters such as board seats, information rights, and protective provisions that give investors veto power over certain major decisions. It may include anti-dilution protections, liquidation preferences, and drag-along or tag-along rights. For venture capital investments, this document works in conjunction with other transaction documents like stock purchase agreements and investor rights agreements. The investment agreement protects both parties by clearly defining terms, expectations, and remedies, and forms the foundation of the investor-company relationship.