Closing agreement refers to the definitive transaction documents signed and delivered at closing, turning negotiated terms into enforceable obligations.

How it works

In a venture financing, the core closing agreement is often a stock purchase agreement (SPA) or series of subscription agreements, plus amended charter, investor rights agreement, voting agreement, and ROFR/co-sale if used. Each investor may sign a joinder; the company certifies cap table accuracy. M&A uses a merger agreement or asset purchase agreement with disclosure schedules listing exceptions to reps. Closing deliverables include board resolutions, secretary’s certificates, good standing letters, and wire instructions. Conditions in the agreement must be satisfied or waived before parties exchange signatures. Post-closing, indemnification, escrow, and milestone earnouts live in these docs—not the term sheet.

Why it matters

• Founders: Reps about IP ownership, litigation, and cap table accuracy are yours to verify. Material misstatements can trigger investor remedies or block closing.
• Investors: Closing agreements encode pro rata, information rights, and registration rights. SPA-style provisions may include bring-down conditions and legal opinions protecting LP interests.
• Counsel: Negotiation heat often moves from term sheet to closing agreement language on liability caps, sandbagging, and founder revesting.

Common mistake

Signing closing agreements without reading disclosure schedules. Schedules qualify broad reps; gaps between schedules and reality cause post-close disputes.

Related ideas

Stock purchase agreement, conditions precedent, closing binder, representations and warranties, and charter amendment are standard pieces of a closing agreement package.