Advisor agreement

2 parties Termination notice Services Confidential information Intellectual property Compensation

What is an advisor agreement?

An Advisor agreement is a legal contract between a company (often a startup or early-stage business) and an individual or entity providing advisory services. This agreement outlines the terms and conditions of the advisory relationship, including the scope of the advisor’s responsibilities, compensation structure, confidentiality obligations, and other relevant provisions.

Advisor agreements are important documents for formalizing the relationship between a company and its advisors, clarifying expectations, and protecting the interests of both parties.

Tips

Define Clear Objectives: Clearly outline the goals and expectations for the advisory relationship. Define the specific areas where the advisor’s expertise and guidance will be valuable to the company.
Clarify Responsibilities: Clearly define the scope of the advisor’s responsibilities, including their role, duties, and expected level of involvement.
Document Changes in Writing: Any amendments or modifications to the content license agreement should be documented in writing and signed by both parties. Keep thorough records of all communications and agreements related to the license arrangement.

Advanced subscription agreement

2 parties Subscription Amount Reverse vesting Major investor rights

What is an Advanced subscription agreement?

An Advanced subscription agreement is a type of investment agreement used by startups or early-stage companies to raise capital from investors. Unlike traditional equity financing, where investors receive shares of the company’s stock immediately upon investment, an advanced subscription agreement allows investors to commit funds upfront in exchange for the right to receive shares at a later date, typically upon the occurrence of a specified trigger event, such as a future funding round or an exit event.

Advanced subscription agreements are often used in jurisdictions where traditional convertible debt instruments may not be suitable or permissible, offering flexibility for startups and investors while simplifying the fundraising process. However, they also involve certain risks and complexities, so it’s important for both parties to carefully review and negotiate the terms of the agreement with the guidance of legal and financial advisors.

Tips

Understand Your Needs: Before drafting the agreement, clearly understand your company’s financing needs and objectives. Determine how much capital you aim to raise, the valuation cap, and the discount rate you’re willing to offer to investors.
Be Transparent: Clearly disclose all terms and conditions to potential investors. Transparency builds trust and reduces the likelihood of misunderstandings or disputes later on.
Provide Context: Include a clear explanation of the purpose and structure of the advanced subscription agreement. Help investors understand how it differs from traditional equity financing and the potential benefits it offers.

agreement