Free Investment Contract Template

Whether you are raising seed funding for your startup, accepting an angel investor, or formalizing a family loan for your small business, an investment Contract Template protects both the company and the investor by documenting the terms of the financial arrangement.

Signeasy offers a free, customizable investment contract template that you can download in PDF or Word format, complete with your specific terms, and send for electronic signatures. Our investment document template works for equity investments, debt financing, SAFE agreements, convertible notes, and more.

What is an investment contract?

An investment contract is a legally binding contract between a company and an investor that outlines the terms and conditions of a financial investment. This investment document specifies how much money is being invested, what the investor receives in return (equity, interest, or future rights), and the obligations of both parties.

A simple investment Contract Template must include the following elements for it to be considered valid:

• Structure of the investment
• Length of the investment
• Purpose of the investment
• Investment amount
• Equity Share
• Form of the investment
• Return on investment (ROI)
• Right of the parties

investment contracts serve several critical purposes: they protect the investor's capital, define the company's obligations, establish governance rights, outline exit strategies, and provide a legal framework for resolving disputes. Without a proper investor Contract Template, both parties face significant legal and financial risks.

Related template: For formal partnership arrangements, see our partnership Contract Template.

Types of investment contracts

Different investment scenarios require different types of agreements. Understanding these variations helps you choose the right investor contract template for your situation:

Equity investment contract

In an equity investment, the investor provides capital in exchange for ownership shares in the company. The investment contract sample specifies the number of shares, the price per share, and any special rights attached to those shares. This is the most common type of investment for startups seeking venture capital or angel investment.

Debt investment contract

Debt investments involve the investor lending money to the company, which must be repaid with interest over a specified period. Unlike equity, the investor does not receive ownership shares. This money investment contract sample is popular with companies that want to raise capital without diluting existing shareholders.

SAFE agreement (Simple Agreement for Future Equity)

Created by Y Combinator, SAFE agreements are widely used by startups for early-stage fundraising. The investor provides capital now in exchange for the right to receive equity in a future financing round. SAFEs typically include a valuation cap or discount rate that rewards early investors. They are simpler and faster to execute than traditional equity agreements.

Convertible note agreement

A convertible note is a hybrid between debt and equity. The investor lends money that converts into equity shares when a triggering event occurs, such as a subsequent funding round. Convertible notes include an interest rate and maturity date, plus conversion terms that typically favor the investor with a discount or valuation cap.

Tip: If your investor is lending money without equity conversion, you may need a promissory note template instead.

Essential clauses in an investment contract template

A comprehensive investor Contract Template should include these key sections:

Investment terms and conditions

This section specifies the investment amount, payment schedule, and what the investor receives in return. For equity deals, it includes the share class, number of shares, and price per share. For debt, it covers interest rates and repayment terms.

Representations and warranties

Both parties make formal statements about their legal standing and the accuracy of information provided. The company warrants that financial statements are accurate, there are no undisclosed liabilities, and the business is operating legally. The investor warrants they are qualified to invest and have the necessary funds.

Governance and voting rights

This section defines how decisions are made within the company and what voice the investor has. It may include board representation rights, voting thresholds for major decisions, and information rights that require the company to share financial reports with investors.

Distribution and profit sharing

The distribution clause explains how profits are allocated among shareholders and when distributions will be made. It should specify the frequency of distributions, any thresholds that must be met before distributions occur, and how the company will handle reinvestment of profits.

Transfer restrictions

Transfer restrictions protect existing shareholders by controlling who can own shares in the company. Common provisions include right of first refusal, which gives the company or existing shareholders the first opportunity to purchase shares before they are sold to outsiders.

Confidentiality and non-disclosure

The investor must agree to keep confidential information and trade secrets private. This protects the company's competitive advantage and is especially important for startups with proprietary technology or business methods. For standalone confidentiality needs, see our mutual non-disclosure Contract Template.

Exit and termination provisions

Exit provisions outline what happens when the investor wants to sell their shares or when the company is acquired. This includes liquidation preferences that determine the order in which shareholders receive proceeds, and tag-along or drag-along rights that affect how shares can be sold.

investment contracts for startups

Startups have unique investment needs that differ from established businesses. Early-stage companies often raise capital through multiple rounds, each with its own terms and investor expectations.

Seed funding agreements

Seed rounds are typically the first external investment a startup receives. These agreements often use SAFE or convertible note structures because the company's valuation is difficult to determine at such an early stage. Key terms include the valuation cap, discount rate, and any pro-rata rights for future rounds.

Series A and later rounds

As startups mature, investment contracts become more complex. Series A and later rounds typically involve priced equity rounds with detailed term sheets, extensive due diligence, and sophisticated governance provisions. Investors at this stage often require board seats, information rights, and protective provisions.

Best practice: Before entering investment negotiations, have your company documents in order. A shareholder Contract Template can help clarify existing owner relationships.

investment contracts for small businesses

Small businesses often seek investment from different sources than venture-backed startups. Understanding these common scenarios helps you create appropriate agreements.

Angel investor agreements

Angel investors are high-net-worth individuals who invest their personal funds in early-stage businesses. Investment amounts typically range from $25,000 to $500,000. Angel investment contracts should clearly define the equity stake, involvement level, and expectations for returns.

Silent partner investments

A silent partner provides capital without taking an active role in business operations. The investment contract must clearly specify that the investor has no management authority while still protecting their financial interest. This arrangement is common in family businesses and real estate ventures.

Family and friend investments

Investments from family and friends require the same legal documentation as any other investment. In fact, having a formal agreement is even more important because it protects personal relationships by setting clear expectations. Include repayment terms, equity stakes if applicable, and what happens if the business fails.

How to write an investment contract

Follow these steps to create a comprehensive investment contract:

1. Define the investment structure: Determine whether the investment will be equity, debt, SAFE, or convertible note. Each structure has different implications for ownership, control, and returns.
2. Agree on valuation and terms: For equity investments, establish the company valuation and price per share. For SAFEs, determine the valuation cap and discount rate.
3. Document investor rights: Specify governance rights, information rights, and any protective provisions the investor requires.
4. Include protective clauses: Add confidentiality, non-compete, and dispute resolution provisions to protect both parties.
5. Define exit provisions: Establish how investors can exit their investment and what happens during acquisition or dissolution.
6. Review with legal counsel: Have an attorney review the agreement before signing, especially for significant investment amounts.
7. Execute and store securely: Sign the agreement electronically and store copies securely for both parties.

Download your free investment Contract Template

Ready to formalize your investment? Download Signeasy's free investment Contract Template today. Our template covers equity investments, debt financing, and can be customized for SAFE agreements or convertible notes. Available in both PDF and Word format.

With Signeasy, you can customize your investment document, collect electronic signatures from all parties, and store your agreements securely in the cloud. Both the company and investors receive digital copies, creating a clear record of the investment terms that can be accessed anytime.