Founder vesting arrangements

Vesting of shares is a popular concept with emerging companies. When instigated by an investor, the main goal is to ensure that founders (or managers) are incentivized to remain with the company for a certain amount of time. When agreed between founders it is a way to conditionally slice the pie, Read more

Version 4.0 of the Capital Waters Subscription and shareholders agreement (preferred shares) released

Today is a big day, since we have released our 4.0 version of the Subscription and shareholders agreement (preferred shares). It all started with this document when we launched Capital Waters in 2014. Our goal was to create a simple set of investment documents for early stage equity deals that people could use as a standard to save time and money. We are grateful that many people took advantage of this resource and Capital Waters became an online hotspot for early stage investments in the Netherlands. Read more

EPOS (Easy Prepayment on Shares) introduced as convertible light for Dutch seed financing deals

Early stage investment rounds in Dutch startups are structured more and more via convertible loans instead of equity nowadays. The main reasons to opt for a convertible instead of equity are that convertibles tend to be faster and cheaper than equity deals and that discussions on the valuation can be postponed (which is usually mainly favorable to the founders since they appreciate not yet having to negotiate on the valuation of the company with an often still far from complete team, an unfinished product and hardly enviable levels of traction). The investment will initially be structured as a regular loan and will only convert into shares at a future qualified investment, against the then applicable valuation (with a discount for the converting investor and usually a conversion cap to protect the converting investor). Read more

THE ‘DEAD LEAVER’ – PERSONAL MATTERS IN BUSINESS

Good/bad leaver provisions are commonplace in shareholders’ agreements. They are often the topic of much discussion between the parties. The part on execution and performance of the provision is sometimes somewhat overlooked. In this blogpost I will focus on the leaver in case of death. Read more

All You Need To Know About Liquidation Preferences

A standard clause in every venture capital termsheet is about liquidation preferences. This blogpost explains how liquidation preferences work in practice, what forms of liquidation preferences exist, and what’s commonly used in the Dutch venture capital market place. Read more