Equity Agreement Template

Equity Agreement FAQs

1) What are the key components of an equity agreement?

Before using an equity agreement, you should thoroughly review it and have a legal professional vet it. Equity agreements commonly contain the following components:

• Equity program. This section outlines the details of the investment plan, including its purpose, conditions, and objectives. It also serves as a statement of intention to create a legal relationship between both parties.
• Identifying information. This section includes identifying information about both parties, including names, emails, addresses, etc.
• Term. This section clearly identifies the timeline of the legal relationship.
• Closing and delivery. This section identifies when the stock purchase will be made and transferred.
• Representation and warranties. This section outlines the rights of both parties and their legal obligations.

Keep in mind that these are just a few of the components included in an equity agreement.

2) What are the benefits of using equity agreements?

Equity agreements are essential for companies raising capital through investors.

They establish a partnership agreement between both parties that includes their rights, responsibilities, and obligations — a framework that offers several benefits.

Primarily, the equity agreement cements a long-term commitment from both the founder and the investor. It also covers all potential damages, as well as steps to take in the event of company losses. This protects both parties from unfair legal action in the face of unforeseen events. Similarly, the equity agreement protects investors by outlining stock vesting provisions to ascertain exactly how much equity they are owed should they choose to sell their shares.

3) How can I customize the equity agreement template to suit my needs?

With Jotform’s intuitive drag-and-drop form builder at your fingertips, customizing your equity agreement template couldn’t be easier. You can rearrange form fields, edit text sections, add signature boxes for multiple signers, adjust fonts and colors, and even drop in your own logo — all without needing any coding knowledge. Plus, you can create a custom signing order to make sure your contract moves through the process as quickly as possible.