Document background
The Startup Investment Agreement is a crucial legal document used when investors are making equity investments in Indian startup companies. This agreement is essential for documenting the terms of investment, protecting the interests of both investors and founders, and ensuring compliance with Indian regulatory requirements. It becomes necessary when a startup is raising capital from institutional or individual investors, whether domestic or foreign, and needs to establish clear terms regarding valuation, share rights, governance, and exit mechanisms. The document must comply with various Indian regulations including the Companies Act 2013, SEBI guidelines, and FEMA regulations (for foreign investments). It's particularly important in the context of India's growing startup ecosystem, where clear legal documentation is essential for future funding rounds and potential exits.
