A basic investor agreement is a legal document that outlines the terms and conditions of an investment between a company and an investor. It serves as a blueprint for the relationship between the parties involved and includes specific details concerning the investment, such as the amount invested, the expected rate of return, and the timeframe for the investment.

The primary purpose of a basic investor agreement is to provide a framework for the investment and to protect the interests of both the company and the investor. By defining the terms of the investment upfront, the agreement can help avoid confusion and disputes later on.

When drafting a basic investor agreement, there are several key provisions that should be included. These provisions typically include:

1. The amount of the investment: This is the amount of money that the investor will put into the company in exchange for an ownership stake.

2. The ownership stake: This outlines the percentage of the company that the investor will own as a result of the investment.

3. The expected return: This outlines the expected rate of return on the investment and the timeframe for achieving it.

4. The use of funds: This outlines how the funds will be used by the company and any restrictions on their use.

5. Dilution protection: This protects the investor from having their ownership stake diluted by future investments.

6. Exit strategies: This outlines the options for the investor to exit the investment, such as through a buyout or an initial public offering (IPO).

Overall, a basic investor agreement is a critical document for any company seeking to raise funds from investors. It sets the foundation for a successful investment relationship and helps ensure that both parties are protected and aligned in their goals. Whether you are a startup seeking capital or an established company looking to expand, a well-crafted investor agreement is an essential tool for success.