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A subscription agreement is a contract between a company and a private investor for the sale of a specific number of shares at a set price. It tracks the shares sold and their pricing, detailing transaction information and confidentiality provisions. Subscription agreements are crucial for privately held companies seeking funding without going public or seeking venture capital. One advantage is that they allow the sale of stock without SEC registration, while a disadvantage is the absence of voting rights for investors, limiting their ability to influence the company’s success.