Legal Documents for All Stages of Startup Funding (Seed, Series A, B, C, D)

Has a VC or angel asked for your cap table, ESOP, constitution, and approvals? Don’t get caught out sending three different versions – this won’t just slow down the round, it’ll quietly stall while they figure out whether you’re fundable at all. 

This article serves as a sequenced checklist so you can line up documents before, during, and after each raise, rather than scrambling through inboxes while momentum dies. 

By the end, you’ll know which startup funding legal documents you need at seed, Series A, B, C and beyond, when they need to exist, and what tends to break when they’re missing in an Australian context.​

Why startup funding paperwork matters

Investors back companies they can understand and trust; they assume you’ve got your house in order. Disorganised documents don’t just create friction – they raise doubts about how you run the business. Meanwhile, clean paperwork signals the opposite: this founder is on top of all the details and is worth backing. 

How missing documents delay or derail funding

Investors move quickly when ownership, rights, and authority are clear. However, they pause the moment they can’t verify these things from your documents. 

A missing or inconsistent cap table, share register, or constitution doesn’t just create administrative friction; it creates uncertainty about whether investors will receive the equity, protections, and control they are paying for. 

In practice, delays usually arrive after everyone is verbally aligned on valuation and terms, when due diligence surfaces gaps like undocumented SAFEs, side letters, or unapproved share issues. 

The result? The round quietly drifts while lawyers try to reconstruct history.​ Fixing these gaps isn’t a quick tidy-up. You’re now spending weeks, sometimes months, sorting out your documents instead of closing the round.

What investors are actually checking

When investors ask for startup legal documents in Australia, they are trying to confirm a few core themes, not just tick boxes. 

• Ownership and dilution certainty: They want to see a cap table and ASIC-compliant share register that match, plus clear treatment of options, ESOP, and convertible instruments such as SAFEs or notes.​
• Governance and control: Your constitution and shareholders’ agreement, including who can appoint directors, what requires special approval, and how you decide key matters (exits, share issues, ESOP), are crucial here.​
• Legal authority to issue shares: Show properly drafted board and (where required) shareholder resolutions authorising each issue or SAFE, and documenting pre‑emptive rights waivers or approvals.​
• Risk exposure: Give investors peace of mind with warranties about the company, proof that IP is owned by the company, and that there is no  historical exposure from early-stage deals with investors or advisers.​

The core legal documents for startup funding to understand

Raising capital is far easier when you recognise each document on the table and what role it plays. Here is a quick overview of the documents you’ll need: 

Document	Purpose	Timing
Term sheet	Negotiate and agree to key terms (valuation, amount, key rights) of investment	Start of any priced round to align on key terms before proceeding to full documentation
SAFE agreement	Lets investors put money in now for future equity on agreed cap/discount terms.	Commonly used pre-seed and bridging rounds
Share subscription/investment agreement	Implements the deal legally: money in, shares issued, warranties and conditions.	Anytime an investor subscribes for new shares
Shareholders agreement	Sets governance, investor rights, transfer rules and exit mechanics between shareholders.	Important from co-founder stage, reviewed and updated at each investment round
Constitution	Company rule book lodged with ASIC, embedding share classes and core governance.	Legally required from incorporation, reviewed and often updated at first priced round
Cap table	Shows who owns what now and on a fully diluted basis, including options and SAFEs.	From day one and updated at every grant, issue or round

Now, let’s take a closer look at each legal document for startup funding in more detail. 

Term sheet

A term sheet is a short-form commercial document that records the headline terms of a proposed investment before long-form legal documents are drafted. 

The term sheet legal requirements in Australia mean that you’ll need to include the following in the document:

• Valuation structure (pre‑ and post‑money)
• Investment amount
• Share class
• Liquidation preferences
• Anti‑dilution
• Board seats
• Key investor rights

Vague or poorly drafted term sheets cause problems because expectations diverge, investors assume protections will appear in final documents, and founders discover late that agreed “headline” terms mean more control or downside protection than they expected.​

SAFE agreement (Australia)

A SAFE (Simple Agreement for Future Equity) is an agreement where an investor gives you money now in exchange for the right to receive shares in a future equity round or exit, instead of receiving shares immediately. 

In Australia, SAFEs are used mainly at very early seed stages to move faster and postpone agreeing on a fixed valuation. That said, they still need careful drafting because a “SAFE” is not a defined instrument in Australian law, so you need to describe it in functional legal terms.​

Here are the key concepts you need to understand as a founder:

• Valuation cap: A maximum valuation used to calculate the conversion price, protecting the investor from being diluted if the next round valuation is very high.​
• Discount: A percentage discount (for example, 15–25%) so SAFE investors convert into shares at a lower price than new money in the qualifying round.​
• Conversion events: The specific triggers (priced equity round, sale, IPO, or sometimes a long-stop date) that cause automatic or elective conversion.​
• Tracking: You must carefully track each SAFE in your cap table or a separate register so you can model dilution and honour conversion terms at the next round.​

SAFEs feel lightweight, but loose tracking or inconsistent terms across multiple SAFEs are among the fastest ways to create confusion and litigation risk when a future lead investor tries to work out who owns what.​

Share subscription or investment agreement

In a priced round (seed, Series A, and later), the share subscription or investment agreement is the contract that documents the actual deal: cash in, shares out. It sets out: 

• The number and class of shares
• Price per share
• Conditions precedent
• Warranties from the founders and the company
• Completion mechanics
• Any ongoing investor rights not already housed in the shareholders’ agreement. 

This agreement translates the term sheet into legally enforceable obligations. It must dovetail with the constitution and shareholders’ agreement so that rights (liquidation preferences, anti‑dilution, vetoes) are correctly reflected in the company’s governing documents.​

Shareholders agreement and constitution

Your constitution and shareholders’ agreement work together to define who actually controls the company after a funding round. 

• The constitution is the company’s rule book lodged with ASIC. 
• The shareholders’ agreement is a private contract between shareholders that governs matters like share transfers, drag-and-tag rights, information rights, and board composition. 

They become essential from priced seed and Series A onwards because investors expect clear rules on exits, future raises, and decision‑making. 

Any conflict between the two documents (for example, inconsistent pre‑emptive rights or veto thresholds) increases the risk of disputes and can scare off sophisticated capital.​

Startup cap table

A cap table is a structured record (usually a spreadsheet or a specialised tool) that shows who owns what equity in your company, now and on a fully diluted basis. The minimum startup cap table legal requirements are: 

• All issued shares by class
• Option holdings and ESOP pool
• SAFEs and convertible notes with their key economic terms
• The resulting ownership percentages in both basic and fully diluted scenarios

A messy, outdated, or inconsistent cap table is an immediate red flag for investors because it suggests poor governance, unquantified dilution, and potential disputes with earlier stakeholders.​

Unsure how to draft consistent legal documents for seed funding? Our startup lawyers are here to help. 

Legal documents at each funding stage

Different startup funding stages see varying legal requirements. This means that the document set that worked for your first angel cheque will not satisfy a lead Series A investor. 

Before raising: your baseline

Before you speak to investors, you need a clean baseline of core documents so you are not scrambling to catch up at the last moment. These baseline documents are: 

• Clean cap table that reconciles with your share register and ASIC filings, including any founder vesting, ESOP allocations, and convertible instruments.​
• Up‑to‑date share register and company details, matching every historical share issue and transfer, and aligned with your constitution.​
• A constitution that allows for different share classes, pre‑emptive rights management, ESOP, and future funding rounds, rather than a generic shelf constitution.​
• Clear IP ownership, with assignment agreements from founders and contractors so the company, not individuals, owns key code, brands, and content.​

Without this baseline, even a friendly angel round can stall while you fix structural gaps that should have been handled at incorporation or shortly after.​

Seed funding documents (SAFE vs priced seed)

Seed funding legal documents in Australia depend on the type of funding path you choose: SAFEs or a priced equity round. Here are the documents you’ll need for each type of seed funding. 

Seed using SAFEs

When you use SAFEs, your key documents and processes usually include:

• SAFE agreements tailored to Australian law, with clearly drafted caps, discounts, trigger events, and investor rights.​
• A cap table that models SAFE conversion under different valuation outcomes, so you know the range of founder dilution at the qualifying round.​
• Board approvals (and shareholder approvals if required by your constitution) to enter each SAFE and to waive any pre‑emptive rights or restrictions on issuing future equity.​

Common mistakes at this stage include stacking multiple SAFEs with inconsistent terms, failing to model the combined dilution impact, and forgetting to update the cap table or investor records after each new instrument. 

Priced seed rounds

For a priced seed round, documents look more like a “mini Series A”:

• A term sheet capturing valuation, round size, share class, liquidation preferences, board seats, and key investor protections
• A share subscription or investment agreement detailing the mechanics of the share issue, conditions to completion, and warranties given to investors
• A shareholders’ agreement documenting governance, information rights, transfer restrictions, drag/tag, and rules for future capital raises
• A constitution update (if required) to align share rights and governance with the term sheet and shareholders’ agreement, often including new preference share classes
• Approvals and completion steps, such as board and shareholder resolutions, ASIC notifications, and updating the share register and cap table after completion.

If you get this suite of documents right from the start, you can simply refine later, rather than building a whole new set of documents at Series A and beyond.​

Legal documents for Series A funding

Series A is usually a step‑change in legal complexity and investor expectations. Australian Series A investors expect robust documentation, tighter warranties and full visibility across your corporate, IP and commercial arrangements.​

Core Series A documents generally include:

• A detailed term sheet that goes beyond price and amount into liquidation waterfalls, anti‑dilution, board composition, veto lists, information rights, and ESOP sizing.​
• An investment agreement with comprehensive warranties on the company’s structure, finances, IP, compliance and contracts, as well as detailed conditions precedent and completion mechanics.​
• A refreshed shareholders’ agreement that reflects new investor rights, reserved matters, reporting obligations, and exit mechanics, often replacing earlier founder‑friendly terms.​
• An updated constitution that embeds the new share classes and rights, and resolves any prior conflicts between internal documents.​

Due diligence expectations also increase sharply at Series A, meaning gaps in earlier rounds (such as undocumented options or poorly drafted SAFEs) are more likely to be uncovered and require last‑minute fixes.​

Common legal mistakes that slow or kill rounds

Most funding rounds are not lost to price, but to messy ownership, missing approvals, and conflicting documents. Fixing these issues before you start raising protects your valuation, your timeline, and your reputation with sophisticated investors.

Cap table and equity mistakes

Cap table and equity issues are among the most common reasons Australian startup rounds drag on or fall over. Frequent problems include:

• Cap table numbers that don’t match the legal share register or ASIC records.
• Informal promises of equity or options to advisers, early employees, or friends that were never documented, leading to disputes when a priced round crystallises value.​
• SAFEs or convertible instruments that are not tracked consistently, or where founders do not understand how caps and discounts compound across multiple instruments.​

These issues undermine investor confidence because they suggest future surprises on ownership and governance, exactly what institutional investors try to avoid.​

Governance and document conflicts

Governance conflicts usually arise not from a single bad document, but from documents that do not align. Typical examples are:

• Constitutions that grant pre‑emptive rights or vetoes inconsistent with what the shareholders’ agreement or term sheet says.​
• Rights promised verbally or via a term sheet (e.g., board seats or liquidation preferences) that never make it into the final executed documents, leaving investors exposed.​
• Side agreements or informal side letters that give certain shareholders special information or liquidity rights create a two‑tier cap table that investors dislike.​

Cleaning up these conflicts late in a round often means renegotiation with existing stakeholders and extra legal costs at precisely the wrong time.​

Process and approval gaps

Even where the documents themselves are solid, process gaps slow deals and raise questions about discipline. Common issues include:

• Missing or incomplete board and shareholder approvals for past share issues, SAFEs, ESOP allocations or major contracts.​
• No clear completion checklist for the round, leading to last‑minute scrambling on ASIC filings, bank signatories, and share certificate or registry updates.​
• Poor document storage or version control, with founders emailing inconsistent drafts to investors or lawyers because no one is sure which version is the right one.​

Smaller investors may tolerate some of this, but institutional funds tend to interpret it as a sign the company is not yet ready for larger amounts of capital.​

Startup fundraising legal checklist

In summary, make sure you have the following investor legal documents for your startup before you seek funding:

• A clean cap table that matches the share register and ASIC records.
• An updated constitution that supports new share classes and ESOP.
• Signed IP assignments from founders, staff, and contractors to the company
• Signed investment documents for any previous investment you’ve had 
• Equity commitments are clearly tracked and modelled in your cap table
• An investment/subscription agreement and shareholders’ agreement that align with the term sheet.
• Board and (if required) shareholder resolutions for compliance with your company’s obligations
• ESOP plan and offer docs for any granted options
• A central, version‑controlled folder with all signed documents ready for investor due diligence

FAQ

What legal documents do I need to raise startup funding in Australia?

For most Australian startups, a funding round will involve a mix of governance, deal, and cap table documents. At a minimum, investors will expect an accurate cap table and share register, a suitable constitution, a term sheet, an investment or subscription agreement, and a shareholders’ agreement for priced rounds. 

What documents are required for seed funding?

You may use SAFEs or a priced round for seed funding. These require slightly different documents. 

For SAFEs, you’ll need a well‑drafted SAFE agreement, a clear cap table, and proper approvals. 

Meanwhile, a priced seed round typically needs a term sheet, share subscription or investment agreement, shareholders agreement, potentially an updated constitution, and a structured completion set including resolutions and ASIC filings.​

Can missing legal documents delay or derail a funding round?

Yes – missing or inconsistent legal documents are a frequent cause of stalled or cancelled Australian startup funding rounds. Preparing a coherent, aligned document set before you launch a raise is one of the highest‑leverage steps a founder can take.

How Lawpath helps founders raise with confidence

Legal platforms like Lawpath offer document templates and legal support designed for Australian startups raising capital. 

Through Lawpath, you can access customisable legal documents, including term sheets, SAFE agreements, shareholders’ agreements, and other company documents, aligned with Australian law and fundraising norms.​ This is about speed and consistency rather than pure “DIY law”: lawyers can review and tailor documents so they work together, rather than as isolated templates. 

Lawpath helps ensure your document suite points in the same direction, reducing the risk that investors uncover conflicts or gaps during due diligence.​