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what is a stock purchase agreement and how is it used as part of the Venture funding process well a stock purchase agreement as the name implies is an agreement between the company and an investor whereby the investor is agreeing to purchase an ownership interest in the company in exchange for certain value usually money now the the ownership interest that the investor is purchasing is generally in the form of shares of stock and that may be a common stock or a preferred stock with specific rights but this is the agreement that memorializes the obligation of the company to sell that stock and the investor to buy that stock at a given rate it is a contract like any other contract it begins with the preambled it simply States who the parties are and where they are located things like that these are not enforceable Provisions these are identification Provisions after that youll sometimes have recitals which is again the scenario or context in which this this agreement is taking place man