The “Advance Investment Agreement” (AIA) is a type of investment agreement used in venture capital transactions. This agreement is typically signed between the investor and the company, and outlines the terms and conditions of the investment. The AIA usually includes provisions related to the amount and structure of the investment, as well as representations and warranties made by the company, conditions for closing the investment, and covenants and obligations of both parties. The purpose of the AIA is to provide a clear and comprehensive framework for the investment and to help ensure that both parties are on the same page regarding their rights and obligations.
AIA is very similar to a SAFE. Both AIA and SAFE agreements are often used in early-stage venture capital transactions and typically involve an investment by an investor in exchange for equity in the company. However, the AIA is usually more comprehensive and typically includes a wider range of provisions related to the investment, such as covenants, representations and warranties, and conditions for closing. On the other hand, the SAFE agreement is typically more streamlined and focuses primarily on the economic terms of the investment, such as the valuation cap and discount rate.