Investment Agreement: Template and How to Draft One (2026)

What an investment agreement is An investment agreement is the contract under which an investor puts money into a company, usually in exchange for shares. It answers the core questions of a funding round: how much is being invested, what the investor gets for it, what must be true and done before the money changes hands, what the company and founders promise about the state of the business, what say the investor has afterward, and how the investor eventually gets its money back. In an equity deal it is often called a share subscription agreement, and it is closely tied to a shareholders agreement that governs life after the investment. The agreement balances two legitimate fears. The investor fears paying for a business that is not what it was told, so it wants due diligence, conditions, and warranties. The company and founders fear losing control or being tied up by heavy investor rights, so they negotiate the board, veto and exit terms. A clear agreement makes both sets of expectations explicit, which is far better than discovering the mismatch after the money is in. This is general information, not legal advice. Investment deals involve company law and securities regulation that vary significantly by country, and getting the filings wrong can have serious consequences, so have an investment agreement reviewed by a qualified professional. ## An investment agreement template you can copy ```

INVESTMENT (SHARE SUBSCRIPTION) AGREEMENT Date: [date] Company: [legal name, number and registered office] Investor: [legal name and address] Founders (if parties): [names] 1. THE INVESTMENT The Investor will subscribe for [number] [class] shares in the Company at [price] per share, for a total of [amount], representing [percentage] of the Company's share capital on a fully diluted basis. 2. CONDITIONS PRECEDENT The Investor's obligation to pay is subject to: satisfactory completion of due diligence; board and shareholder approvals; execution of the shareholders agreement; and [any regulatory filings or consents]. If the conditions are not met by [long-stop date], either party may walk away. 3. COMPLETION On completion, the Investor pays the subscription amount, the Company issues and registers the shares, updates its register of members, and delivers share certificates and the required filings. 4. USE OF FUNDS The Company will use the investment for [agreed purposes, for example product, hiring, working capital] as set out in the agreed plan (Schedule 1). 5. WARRANTIES The Company and [Founders] warrant that: the accounts are accurate; the Company owns or has the right to use its intellectual property; there is no undisclosed litigation or material liability; the Company complies with applicable law; and the information given to the Investor is true in all material respects. Exceptions are set out in the Disclosure Letter. 6. INVESTOR RIGHTS The Investor has: [a board seat or observer right]; information rights to receive [accounts and management reports]; and consent rights over [listed major decisions, for example new debt, share issues, sale of the business]. These continue while the Investor holds at least [percentage]. 7. SHARE TRANSFERS AND EXIT Share transfers are subject to the shareholders agreement, including [pre-emption, tag-along and drag-along rights]. The parties will work toward an exit by [timeframe / event], such as a sale or listing. 8. CONFIDENTIALITY AND ANNOUNCEMENTS The terms are confidential. No announcement is made without both parties' consent, except as required by law. 9. GOVERNING LAW This agreement is governed by the law of [place]; disputes are resolved in [place / by arbitration]. SIGNED For the Company ____________ Date ______ Investor ____________ Date ______ [Founders] ____________ Date ______

- Vague use of funds. An investor should know roughly how its money will be spent; founders should not over-promise.
- Warranties with no disclosure letter. Warranties without a proper disclosure process either expose the founders unfairly or get watered down to meaninglessness.
- Consent rights that are too broad. A veto over ordinary spending can paralyse a company; keep investor consents to major decisions.
- Skipping the regulatory filings. Issuing shares without the required corporate and securities filings can invalidate the issue and attract penalties. ## How jurisdiction changes things Company law and securities regulation shape these deals, and both are national. In India, a private placement of shares is governed by section 42 of the Companies Act, 2013, with the filing of form PAS-3 for the return of allotment, and foreign investment adds requirements under the Foreign Exchange Management Act (FEMA) and sectoral caps. In the United States, a private financing must fit a securities-law exemption and usually involves state filings. In the UK, companies follow the Companies Act process for allotting shares, and investor-friendly schemes such as SEIS and EIS carry their own conditions. Stamp duty on share issues or transfers applies in several jurisdictions, including India. Confirm the exact company-law, securities and tax steps for the company's jurisdiction and the investor's status before closing. ## Keeping the deal documents together A funding round is not one document, it is a set that must agree with itself: the investment agreement, the shareholders agreement, the disclosure letter, the cap table, board and shareholder resolutions, and the filings. The value of the record is in keeping them consistent, so the shares issued, the rights granted, and the disclosures made all line up, and so the next round can build on a clean history. That is the same discipline every company needs across its contracts, with higher stakes. Drafting from a clear template, catching a clause where a warranty or an investor right is one-sided or missing, editing wording in plain language, and holding each version with its date can live in one AI workspace tuned to how your company documents deals. [Adira](https://adiralaw.com) is built around that single workspace idea, and it flags India-specific items such as the section 42 and PAS-3 steps as part of its document checks. For a single investment agreement the template above is a starting point to take to your adviser; the point worth borrowing is that a financing stays clean only when every document behind it lives in one place and in step.