Starting a startup is exciting, but understanding the shareholder agreement (SHA) is crucial. Today, let's focus on Dilution.
What is dilution? Imagine you and a friend each own half a pizza (50% each). If you bring another friend in and share more
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Anonymous 2
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udaan.com • 8m
You should also mention things like Vesting Schedules, Drag-Along Rights, Founder Removal Provisions and right to refuse clauses. will be more enriching.
Shareholder Agreements: The Bedrock of Your Business
A well-crafted shareholder agreement is crucial for a company's success. As a corporate lawyer with years of experience, I've seen firsthand the impact these agreements can have.
Key clauses to c
Tag Along v/s Drag Along Rights
When drafting agreements, Tag Along and Drag Along Rights are essential clauses that shape how investors and founders navigate ownership changes. Let's break down the impact from both perspectives:
For Investors:
1.
Demystifying the Ownership Structure Clause in Shareholder Agreements (SHA)📍
The Ownership Structure clause in your SHA is crucial. Here's why:
1. Defines Equity Distribution:
It outlines who owns what percentage of the company. This impacts deci
Transfer Rights Clauses in SHAs from an Investor’s Perspective!!
When investing in startups, a well-drafted Shareholders Agreement (SHA) isn’t just a formality, it’s the foundation that protects their financial interests and ensures strategic contro
Why Every Startup Needs a Founder Vesting Clause
When launching a startup, it's crucial to protect your team and the company’s future. One key safeguard? The Founder Vesting Clause in your Term Sheet.
What is Founder Vesting?
Founder vesting ensur
As a founder, your startup is your baby. But what about when that Golden Exit opportunity appears? Drag-Along Rights in your Shareholder Agreement(SHA) are crucial for ensuring a smooth acquisition process.
What are Drag-Along Rights?
They empower
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2 replies6 likes
Mr Z
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Medial • 5d
Flipkart sold for $16 billion, but the founders got almost nothing.
After looking at 100+ startup deals, I found some toxic terms that hurt founders:
1. Liquidation Preferences: Investors get their money back first. If the sale price is low, founde
Startup Founders: Is Your Shareholder Agreement Protecting Your Vision?
Let's talk about a critical component that often gets overlooked: the Voting Rights Clause.
As a founder, you've poured your heart and soul into your startup. But have you con
Last time we discussed dilution in SHAs. Today, we tackle the Board of Directors (BOD)!
The BOD: This group oversees your startup's big picture strategy. The SHA defines how many board members there are and how they're chosen.
Why it matters: Havin
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0 replies4 likes
Saksham
Stealth • 5m
We recently assisted a tech startup with a critical company incorporation matter, highlighting common pitfalls entrepreneurs often overlook. Here's what you need to know:
1. Clearly define ownership of all Intellectual Property.
2. Choose the right