Investment Agreements
Whether you're raising your first round or navigating a complex multi-stage funding deal, having the right legal framework is non-negotiable. At Aristo Legal, our Investment Agreement services are designed to give you the strategic edge — protecting your interests, ensuring compliance, and setting the stage for long-term success.
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From drafting airtight Term Sheets and Shareholders’ Agreements to structuring Share Subscription Agreements and managing FDI compliance, we help you transform investor conversations into watertight legal commitments. Our team also advises on convertible instruments, ESOP structuring, and exit rights, ensuring every clause aligns with your growth ambitions.
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Term Sheet Drafting and Negotiation
The Term Sheet is the blueprint for the entire investment. It outlines the key commercial and legal terms of the deal in a non-binding format. A meticulously drafted Term Sheet prevents future misunderstandings and ensures a smoother due diligence and documentation process. We help you draft, review, and negotiate a balanced Term Sheet that aligns with your long-term vision, covering valuation, investment amount, investor rights, and governance.
Foreign Direct Investment (FDI) Compliance
Accepting funds from foreign investors requires strict adherence to India's Foreign Exchange Management Act (FEMA) and Reserve Bank of India (RBI) regulations. Non-compliance can lead to significant penalties. We ensure your investment is structured to be fully compliant with FDI policy, handling all necessary filings like the Form FCGPR and providing guidance on sectoral caps and pricing guidelines.
Share Subscription Agreement (SSA)
The SSA is the definitive agreement through which the new investor subscribes to new shares in your company. It formalises the process of the investment itself, detailing the number of shares, the price per share, and the conditions precedent (tasks to be completed before the investment is made). We draft a robust SSA that clearly defines the mechanics of the share issuance, payment obligations, and the representations and warranties made by the company and founders.
Legal Due Diligence
Investors will conduct thorough due diligence to assess any legal, financial, or operational risks in your company. Being prepared is crucial for a smooth and fast closing process. We help you set up a clean and organised virtual data room (VDR) and proactively identify and rectify any potential legal red flags related to corporate records, contracts, IP ownership, and compliance before investors begin their review.
Shareholders' Agreement (SHA)
The Shareholders' Agreement (SHA) is arguably the most critical long-term document in any investment deal. It governs the relationship between all shareholders—founders and investors—after the investment is complete, outlining their respective rights, obligations, and the rules for managing the company. We craft comprehensive SHAs that protect your interests while establishing a fair and effective governance framework.
Structuring Exit Strategies
A successful investment lifecycle includes a clear path to an exit. We help founders and investors plan for this from day one, ensuring a smooth and profitable transition when the time is right.
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Secondary Sales: Share sale agreements for early liquidity ahead of a full exit or IPO.
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Buy-Backs: Structured rights for companies or founders to repurchase investor shares.
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Exit Waterfalls: Clear provisions to allocate exit proceeds, protecting investor ROI and founder equity.
Our Investment Agreement Services
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Related Articles
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What happens at the "closing" of an investment round?"Closing" is the final step where all conditions precedent are met, the definitive agreements (SSA, SHA) are signed by all parties, and the investor wires the investment funds to the company's bank account. In return, the company officially allots the new shares to the investor.
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Do I need to create an ESOP (Employee Stock Option Plan) pool before raising funds?Investors often require founders to create an ESOP pool before the investment. This is typically calculated on the "pre-money" valuation, meaning the founders' equity is diluted to create the pool, not the new investor's. It's a key negotiation point that impacts founder ownership.
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What are the basic requirements for receiving Foreign Direct Investment (FDI) in India?The company must be eligible to receive FDI under the relevant sector's policy (most are under the "automatic route"). The investment must comply with RBI's pricing guidelines (shares cannot be issued to foreigners for less than their fair market value), and mandatory reporting must be done via the FIRMS portal (Form FCGPR) within 30 days of allotment.
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What is the main difference between a Share Subscription Agreement (SSA) and a Shareholders' Agreement (SHA)?The SSA governs the one-time act of the investor "subscribing" to (or buying) new shares from the company. Its purpose is fulfilled once the investment is made. The SHA, on the other hand, is a long-term document that governs the ongoing relationship and mutual rights/obligations of all shareholders after the investment is complete.
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What is legal due diligence and why is it important?Legal due diligence is an investigation conducted by investors into a company's legal affairs before an investment. They check corporate records, contracts, IP ownership, employment issues, and compliance. A clean due diligence report gives investors confidence and can speed up the funding process significantly.
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What is a "cap table"?A capitalization table, or "cap table," is a spreadsheet that details the equity ownership of a company. It lists all the company's securities (common shares, preferred shares, options) and who owns them, showing ownership percentages on a fully diluted basis. It is a critical tool for managing equity.
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What are the most important clauses to look for in a Shareholders' Agreement?Key clauses include liquidation preference (who gets paid first on an exit), anti-dilution provisions (protection from future down-rounds), board seats, veto rights (key decisions investors can block), and exit provisions like ROFR, Tag-Along, and Drag-Along rights.
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Why can't I just use a standard investment agreement template from the internet?Templates are a risky one-size-fits-all solution for a situation that is unique to your company. They often lack crucial protections, may not be compliant with Indian law, and fail to capture the specific commercial understanding of your deal. A poorly drafted agreement can lead to costly disputes, loss of control, and problems in future funding rounds. Professional legal advice is an investment in your company's future.
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What is equity dilution and how can I manage it?Equity dilution happens when a company issues new shares to investors, reducing the percentage of ownership of existing shareholders (including founders). While dilution is a natural part of fundraising, it can be managed by negotiating a fair valuation and understanding the impact of clauses like ESOP pools and anti-dilution provisions.
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What is a Term Sheet and is it legally binding?A Term Sheet is a preliminary, non-binding document that outlines the basic terms and conditions of an investment. While most of its clauses (like valuation, investment amount) are not legally enforceable, certain clauses, such as 'Confidentiality' and 'Exclusivity' (or 'No-Shop'), are typically made legally binding.
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What are the essential clauses in a SaaS Agreement?A well-drafted SaaS Agreement should include clauses on scope of service, user rights, data ownership, payment and billing, service levels (SLA), IP protection, termination, and liability limitation. These ensure clarity, reduce disputes, and support your business model.
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Do I need a different legal agreement for enterprise clients versus individual users?Yes, absolutely. Individual users typically subscribe via a standardised "click-wrap" Terms of Service agreement. However, enterprise clients require a more detailed Master Service Agreement (MSA). An MSA is heavily negotiated and includes specifics on service levels (SLAs), data security warranties, indemnification, liability caps, and custom feature requirements. Offering a one-size-fits-all agreement can lose you major enterprise deals or expose you to unacceptable levels of risk.
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What are the legal requirements for SaaS companies operating internationally from India?If you serve customers outside India, you must comply with their local laws. For example, if you have customers in Europe, you need to be GDPR compliant. If you serve California residents, the CCPA/CPRA applies. Your SaaS agreement and privacy policy must be drafted to accommodate these international regulations.
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What is a Data Processing Addendum (DPA) and when is it required?A DPA is a legal document that outlines how customer data is collected, processed, stored, and shared. It’s mandatory for SaaS providers handling personal data, especially under GDPR, DPDP (India), and CCPA. We ensure your DPA aligns with global privacy laws.
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What are the key legal risks for a SaaS startup during fundraising?Investors conduct rigorous legal due diligence. The biggest red flags for SaaS startups include: unclear IP ownership (e.g., code written by freelancers without proper contracts), non-compliance with data privacy laws like DPDPA or GDPR, poorly drafted customer agreements that create liability, and improper corporate structuring.
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What legal documents are essential for a SaaS company in India in 2025?Every SaaS business in 2025 needs a core set of legally robust documents to operate securely and scale effectively. The absolute essentials include: a comprehensive SaaS Agreement (covering terms of service, subscription terms, and payment policies), a Privacy Policy that is fully compliant with India's Digital Personal Data Protection Act (DPDPA) 2023, Terms of Use and a Cookie Policy. Depending on your business model, you may also need a Service Level Agreement (SLA), a Data Processing Addendum (DPA), and watertight Vendor and Employee Contracts. Our legal services ensure these documents are tailored specifically to your product and jurisdiction.
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What’s the difference between Terms of Service and a SaaS Agreement?Terms of Service (ToS) are general user-facing policies for your platform, while a SaaS Agreement is a negotiated contract—typically used for enterprise clients. We help you create both, depending on your customer base and business needs.
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What is a SaaS Agreement and why do I need one?A SaaS Agreement is a legal contract between a software provider and its customers that governs access to cloud-based services. It protects your intellectual property, limits liability, defines payment terms, and ensures compliance with privacy laws. Every SaaS business—whether B2B or B2C—needs one to operate securely and professionally.
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Do I need a separate SLA (Service Level Agreement)?Yes, especially if you're offering enterprise SaaS or business-critical services. An SLA defines performance metrics like uptime, support response times, and remedies for failure. We help you draft SLA terms that are commercially fair and legally enforceable.
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How is a SaaS Agreement different from a traditional software license?Unlike traditional software licenses that permit downloading or installing software, SaaS Agreements allow users to access software via the cloud. These contracts focus on uptime, subscription models, support, and data protection—making them essential for modern software businesses.
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Why do FAQs matter?FAQs are a great way to help site visitors find quick answers to common questions about your business and create a better navigation experience.
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What is an FAQ section?An FAQ section can be used to quickly answer common questions about your business like "Where do you ship to?", "What are your opening hours?", or "How can I book a service?".
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Where can I add my FAQs?FAQs can be added to any page on your site or to your Wix mobile app, giving access to members on the go.
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How do I add a new question & answer?To add a new FAQ follow these steps: 1. Manage FAQs from your site dashboard or in the Editor 2. Add a new question & answer 3. Assign your FAQ to a category 4. Save and publish. You can always come back and edit your FAQs.
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How do I edit or remove the 'Frequently Asked Questions' title?You can edit the title from the FAQ 'Settings' tab in the Editor. To remove the title from your mobile app go to the 'Site & App' tab in your Owner's app and customize.
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Can I insert an image, video, or GIF in my FAQ?Yes. To add media follow these steps: 1. Manage FAQs from your site dashboard or in the Editor 2. Create a new FAQ or edit an existing one 3. From the answer text box click on the video, image or GIF icon 4. Add media from your library and save.