Author: Erik Byrenius

Vedtægter

Vedtægterne kan betegnes som en helt grundlæggende udgave af aktionæroverenskomsten, herunder nogle formaliteter vedrørende aktiekapital, selskabsnavn mv. De kan også indeholde forkøbsret og efterkøbsret.

 

Vedtægterne gælder altid for alle aktionærer i selskabet, uanset om de kan lide dem eller ej. Hold dem derfor meget grundlæggende og sæt alt andet ind i aktionæroverenskomsten. For at ændre vedtægterne skal du have kvalificeret flertal på en generalforsamling. Bare sørg for, at artiklerne er rene, og du behøver ikke at opdatere dem ofte.

/Erik Byrenius

 

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Focus on running your business, instead of spending time and money on unnecessary legal paperwork and negotiations. Help us keep StartupTools free by making a donation.

Subscription and Shareholders’ Agreement

Subscription and Shareholders’ Agreement

After you have agreed on the term sheet (signed or not), the investor will start the final parts of the due diligence while the subscription agreement and shareholders’ agreement are drafted. When the due diligence is complete it’s time to sign the subscription agreement and shareholders’ agreement.

Subscription Agreement

The subscription agreement regulates the terms of the investment itself, what happens in connection to the investment and what warranties the founders give to the new investors. The shareholders’ agreement, on the other hand, stipulates the terms for the future partnership and is not directly related to the investment itself. The subscription agreement refers to the shareholders’ agreement and typically they are signed at the same time.

Sometimes, these documents are merged to one big document (often called investment agreement) but for clarity they are usually separated.

The subscription agreement is very similar to the term sheet and doesn’t contain so many new things. Some things are explained in greater detail, such as warranties and indemnification but it’s quite straightforward.

Don’t forget to add the investors’ and their amounts in the clause called subscription. Sometimes the investors have to sign separate subscription lists but in this version the subscription takes place by signing the subscription agreement.

Shareholders’ Agreement

The shareholders’ agreement is probably one of the most complex and important agreements you will ever sign. It contains almost everything related to the shareholding of the company, including vesting, share transfer restrictions, drag along, non-competition etc. Breaking the agreement can have severe consequences so make sure you understand it.

Hopefully there will be nothing strange compared to the term sheet but count on new discussions popping up around details not specified in the term sheet. For example, everything in the clause transfer of shares is not mentioned in the term sheet, but quite standard.

The shareholders’ agreement should always be signed by all shareholders in the company. If new shareholders enter the company, they have to sign the existing agreement by signing an adherence agreement (attached as a schedule to the shareholders’ agreement).

If you have a lead investor, use the shareholders’ agreement called “with VC lead investor” (duh!). The other agreement (“only small investors”) is tailored for a startup raising a small round where no investor takes lead. If you have no investor at all, but want a shareholders’ agreement between the founders, please see the Shareholders’ Agreement Without Investors instead.

/Erik Byrenius

Shareholders’
Agreement Without Investors

After you have agreed on the term sheet (signed or not), the investor will start the final parts of the due diligence while the subscription agreement and shareholders’ agreement are drafted. When the due diligence is complete it’s time to sign the subscription agreement and shareholders’ agreement.

Subscription Agreement

The subscription agreement regulates the terms of the investment itself, what happens in connection to the investment and what warranties the founders give to the new investors. The shareholders’ agreement, on the other hand, stipulates the terms for the future partnership and is not directly related to the investment itself. The subscription agreement refers to the shareholders’ agreement and typically they are signed at the same time.

Sometimes, these documents are merged to one big document (often called investment agreement) but for clarity they are usually separated.

The subscription agreement is very similar to the term sheet and doesn’t contain so many new things. Some things are explained in greater detail, such as warranties and indemnification but it’s quite straightforward.

Don’t forget to add the investors’ and their amounts in the clause called subscription. Sometimes the investors have to sign separate subscription lists but in this version the subscription takes place by signing the subscription agreement.

Shareholders’ Agreement

The shareholders’ agreement is probably one of the most complex and important agreements you will ever sign. It contains almost everything related to the shareholding of the company, including vesting, share transfer restrictions, drag along, non-competition etc. Breaking the agreement can have severe consequences so make sure you understand it.

Hopefully there will be nothing strange compared to the term sheet but count on new discussions popping up around details not specified in the term sheet. For example, everything in the clause transfer of shares is not mentioned in the term sheet, but quite standard.

The shareholders’ agreement should always be signed by all shareholders in the company. If new shareholders enter the company, they have to sign the existing agreement by signing an adherence agreement (attached as a schedule to the shareholders’ agreement).

If you have a lead investor, use the shareholders’ agreement called “with VC lead investor” (duh!). The other agreement (“only small investors”) is tailored for a startup raising a small round where no investor takes lead. If you have no investor at all, but want a shareholders’ agreement between the founders, please see the Shareholders’ Agreement Without Investors instead.

/Erik Byrenius

Download

Support

Focus on running your business, instead of spending time and money on unnecessary legal paperwork and negotiations. Help us keep StartupTools free by making a donation.

Shareholders’ Agreement Without Investors

Shareholders’
Agreement Without Investors

Note: The “Shareholders’ Agreement (without investors)” is the document formerly known as the “Founders’ Agreement”. We have renamed it to avoid confusion since it is, in fact, a shareholders’ agreement. We elaborate more on the sequential relationship of our shareholders’ agreements here.

When you join forces with your co-founders to start a new business, legal stuff is probably one of the last things you want to spend time on – especially the sometimes sensitive subject of commitment, cooperation and ownership. Nevertheless, agreeing on these topics from day one may be save you a lot of arguments and headache down the road. That’s why you should always have a shareholders’ agreement.

A shareholders’ agreement without investors is very similar to a shareholders’ agreement (SHA) with investors. It is still a SHA in the sense that it’s an agreement between the shareholders. Without any external shareholders some of the more important topics in the agreement are dedication, vesting, share transfers and decision-making (rather than regulating the relationship between founders and investors).

Standard Founders’ Agreement Terms

This is a very brief summary of some of the key terms in the complete founders’ agreement that you can download below.

Participation Right:The shareholders will have the right, but not the obligation, to participate in subsequent issuances of any equity securities on a pro rata basis.
Protective Provisions:A qualified founder majority is required to (i) amend the articles of association; (ii) issue, redeem or purchase shares or other equity securities; (iii) adversely change rights of the shares; (iv) declare or pay any dividend or make a decision on other asset distributions; (v) guarantee any indebtedness, save for trade accounts of the company, or incur any indebtedness in excess of DKK [amount]; (vi) merge, demerge, liquidate or dissolve the company or a subsidiary; (vii) transfer, lease, license (other than licenses granted in the ordinary course of business on a non-exclusive basis), pledge or encumber assets or rights material to the company; (viii) materially amend the business plan; (ix) hire, fire or amend the terms of the employment contract of the CEO; and (x) enter into any agreement or assignment with a shareholder or its immediate family member or any entity controlled by a shareholder and/or its immediate family member(s).
Board of Directors:Each founder shall elect one director.
Right of First Refusal:Transfer of shares in the company is subject to other shareholders’ right of first refusal.
Drag-Along:In the event a qualified shareholder majority accepts an offer to sell or otherwise transfer their shares to an independent bona fide third party, all other shareholders consent to sell or otherwise transfer their shares on the same terms and conditions as the majority shareholders who have accepted the offer.
Tag-Along:The shareholders shall have the right to participate in any sale or other transfer of shares in the same proportion and on the same terms and conditions as offered to the selling shareholder.
Vesting:

Shares held by the founders will vest over six years as follows: 16.7% to vest one year after closing and the remaining 83.3% to vest in equal monthly installments under the following 60 months. During the vesting period, the founders may not transfer their shares without the approval of a qualified founder majority.

During the vesting period, any unvested shares of a founder who leaves the company may be purchased by the other shareholders pro rata at (i) quota value if the founder is a ”bad leaver”, or (ii) market value if the founder is a ”good leaver”.

Non-Compete and Non-Solicitation:Each founder is required to sign a non-competition and a non-solicitation commitment, valid until one year from the date he/she ceases to be an employee or a director of or a consultant to the company, whichever is the latest.
Intellectual Property:The founders shall assign all relevant intellectual property to the company.

For the complete version of the shareholders’ agreement, please download the document below.

/Erik Byrenius

Shareholders’
Agreement Without Investors

Note: The “Shareholders’ Agreement (without investors)” is the document formerly known as the “Founders’ Agreement”. We have renamed it to avoid confusion since it is, in fact, a shareholders’ agreement. We elaborate more on the sequential relationship of our shareholders’ agreements here.

When you join forces with your co-founders to start a new business, legal stuff is probably one of the last things you want to spend time on – especially the sometimes sensitive subject of commitment, cooperation and ownership. Nevertheless, agreeing on these topics from day one may be save you a lot of arguments and headache down the road. That’s why you should always have a shareholders’ agreement.

A shareholders’ agreement without investors is very similar to a shareholders’ agreement (SHA) with investors. It is still a SHA in the sense that it’s an agreement between the shareholders. Without any external shareholders some of the more important topics in the agreement are dedication, vesting, share transfers and decision-making (rather than regulating the relationship between founders and investors).

Standard Founders’ Agreement Terms

This is a very brief summary of some of the key terms in the complete founders’ agreement that you can download below.

Participation Right:The shareholders will have the right, but not the obligation, to participate in subsequent issuances of any equity securities on a pro rata basis.
Protective Provisions:A qualified founder majority is required to (i) amend the articles of association; (ii) issue, redeem or purchase shares or other equity securities; (iii) adversely change rights of the shares; (iv) declare or pay any dividend or make a decision on other asset distributions; (v) guarantee any indebtedness, save for trade accounts of the company, or incur any indebtedness in excess of DKK [amount]; (vi) merge, demerge, liquidate or dissolve the company or a subsidiary; (vii) transfer, lease, license (other than licenses granted in the ordinary course of business on a non-exclusive basis), pledge or encumber assets or rights material to the company; (viii) materially amend the business plan; (ix) hire, fire or amend the terms of the employment contract of the CEO; and (x) enter into any agreement or assignment with a shareholder or its immediate family member or any entity controlled by a shareholder and/or its immediate family member(s).
Board of Directors:Each founder shall elect one director.
Right of First Refusal:Transfer of shares in the company is subject to other shareholders’ right of first refusal.
Drag-Along:In the event a qualified shareholder majority accepts an offer to sell or otherwise transfer their shares to an independent bona fide third party, all other shareholders consent to sell or otherwise transfer their shares on the same terms and conditions as the majority shareholders who have accepted the offer.
Tag-Along:The shareholders shall have the right to participate in any sale or other transfer of shares in the same proportion and on the same terms and conditions as offered to the selling shareholder.
Vesting:

Shares held by the founders will vest over six years as follows: 16.7% to vest one year after closing and the remaining 83.3% to vest in equal monthly installments under the following 60 months. During the vesting period, the founders may not transfer their shares without the approval of a qualified founder majority.

During the vesting period, any unvested shares of a founder who leaves the company may be purchased by the other shareholders pro rata at (i) quota value if the founder is a ”bad leaver”, or (ii) market value if the founder is a ”good leaver”.

Non-Compete and Non-Solicitation:Each founder is required to sign a non-competition and a non-solicitation commitment, valid until one year from the date he/she ceases to be an employee or a director of or a consultant to the company, whichever is the latest.
Intellectual Property:The founders shall assign all relevant intellectual property to the company.

For the complete version of the shareholders’ agreement, please download the document below.

/Erik Byrenius

Download

Support

Focus on running your business, instead of spending time and money on unnecessary legal paperwork and negotiations. Help us keep StartupTools free by making a donation.

Employment Agreement

Employment
Agreement

One might think that employments is one of those few areas where standard agreements already exist. The law is pretty strict on what can and cannot be agreed between employer and employee, there are lots of legal precedent cases.

However, not even lawyers agree on what a normal employment contract (ansættelseskontrakt) looks like. To all employers, to all employees and to all labor lawyers out there – unite! We’re proud to present to you three different templates for Danish employment agreements:

  • Permanent employment (fastansættelse): This is the normal form of employment with monthly salary in Denmark, where the employee is hired for an indefinite period of time, usually starting with a probationary period.
  • Managing directors: This is the normal form of employment with monthly salary in Denmark, where the employee is hired for an indefinite period of time, usually starting with a probationary period.
  • Hourly Wage: If someone’s salary is irregular and based on the number of hours worked, this template may be useful.

As always, the information and documents published here are intended for general information purposes only. When using the documents, in case of doubt, always consult with legal expertise before signing.

/Erik Byrenius

Download

Support

Focus on running your business, instead of spending time and money on unnecessary legal paperwork and negotiations. Help us keep StartupTools free by making a donation.

Employment
Agreement

One might think that employments is one of those few areas where standard agreements already exist. The law is pretty strict on what can and cannot be agreed between employer and employee, there are lots of legal precedent cases.

However, not even lawyers agree on what a normal employment contract (ansættelseskontrakt) looks like. To all employers, to all employees and to all labor lawyers out there – unite! We’re proud to present to you three different templates for Danish employment agreements:

  • Permanent employment (fastansættelse): This is the normal form of employment with monthly salary in Denmark, where the employee is hired for an indefinite period of time, usually starting with a probationary period.
  • Managing directors: This is the normal form of employment with monthly salary in Denmark, where the employee is hired for an indefinite period of time, usually starting with a probationary period.
  • Hourly Wage: If someone’s salary is irregular and based on the number of hours worked, this template may be useful.

As always, the information and documents published here are intended for general information purposes only. When using the documents, in case of doubt, always consult with legal expertise before signing.

/Erik Byrenius

Download

[ninja_form id=1]

Support

Focus on running your business, instead of spending time and money on unnecessary legal paperwork and negotiations. Help us keep StartupTools free by making a donation.

Term Sheet

Term Sheet

Our term sheet is a balanced and standardized term sheet for your seed round. Both VC firms, angel investors, entrepreneurs and lawyers have been involved in the process of creating this new Nordic standard.

What is a Term Sheet?

Use a term sheet in discussions with investors. When you have agreed on everything, you can choose to sign the term sheet (most of it is non-binding anyway) or just move straight on and translate it into a subscription agreement and shareholders’ agreement.

The term sheet is not binding for anyone (except the clauses expensesconfidentiality and, when used, exclusivity). It might sound strange, but the term sheet is more like a declaration of intentions than a contract. Usually, when a term sheet is agreed upon, the deal will actually close, but that’s not guaranteed. Things can go bad during the due diligence and the investor can pull out, or ask for new terms.

This does not mean that the term sheet is not important. Unless something significant happens after the term sheet is agreed upon, the deal will happen and you are (at least morally) bound to the terms mentioned in the term sheet. Make sure that you are willing to commit to everything in the term sheet; don’t assume that you can discuss the details later.

The subscription agreement and the shareholders’ agreement contain a lot more details than the term sheet but those details are usually of minor importance compared to what is brought up in the term sheet. Hence, if there are other things that are very important to you, make sure you mention them in the term sheet as well.

After you have agreed on the term sheet (signed or not), the investor will start the final parts of the due diligence while the subscription agreement and shareholders’ agreement are drafted. When the due diligence is complete it’s time to sign the subscription agreement and shareholders’ agreement.

Further Reading

For explanations of the terms in the term sheet, please read the comments in the downloadable file. If you then have even more questions regarding the terms, especially regarding how investors reason, there is a great book, Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist, explaining different terms in term sheets in a thorough and pedagogical way.

Also, if you need help with managing your cap table, please see the blog Venture Hacks. They have created a flexible template for organizing your cap table and calculating how option pools end convertible debts affect your shareholding and valuations. The document is quite complicated but includes everything you need for your cap table. You can also use the online service captable.io which is very powerful (and free!).

Standard Terms

This is a summary of the complete term sheet that you can download below. The text within [square brackets] is optional and/or should be edited.

Securities to Issue: Ordinary shares of the Company (“Shares”).
Investment Amount: DKK [amount] in aggregate.
Investors: [Company Names, Company ID Numbers] (“Investors”).
Lead Investor: [Company Name, Company ID Number] (“Lead Investor”).
Founders: [Company/Personal Names, Company/Personal ID Numbers] (“Founders”). In this Term Sheet, “Founder” may refer to a company and/or the physical person in control of such a company.
Existing Shareholders: [Company Names, Company ID Numbers].
Subscription Price: The price per each Share (the “Original Subscription Price”) is based on a Company pre-money valuation of DKK [amount].
Capitalization: The Company’s capital structure before and after the completion of the investment is set forth in Exhibit A.
[Option Pool:] [The parties agree and acknowledge that the Company, after the investment, will issue warrants to current and future key employees, corresponding to up to [10-15]% of the shares in the Company post-money.]
[Liquidation Preference:] [Upon a liquidation, merger, sale or other type of transaction in which control in the Company or substantially all of its assets are transferred, the Investors shall receive, per held share, the higher of (i) one times the Original Subscription Price or (ii) the amount they would receive if all shareholders received their pro rata share of such assets or proceeds. The remaining proceeds shall be distributed to the Founders and the Existing Shareholders on a pro rata basis.]
Financial Information: The Lead Investor will receive standard information, including but not limited to monthly reporting of key business metrics and a summary of the Company’s financial status. The other Investors will receive quarterly financial reporting.
Participation Right: The Investors will have the right, but not the obligation, to participate in subsequent issuances of any equity securities on a pro rata basis.
Protective Provisions: Approval of the Lead Investor is required to (i) amend the articles of association; (ii) issue, redeem or purchase shares or other equity securities; (iii) adversely change rights of the Shares; (iv) declare or pay any dividend or make a decision on other asset distributions; (v) guarantee any indebtedness, save for trade accounts of the Company, or incur any indebtedness in excess of DKK [amount]; (vi) merge, demerge, liquidate or dissolve the Company or a subsidiary; (vii) transfer, lease, license (other than licenses granted in the ordinary course of business on a non-exclusive basis), pledge or encumber assets or rights material to the Company; (viii) materially amend the business plan; (ix) hire, fire or amend the terms of the employment contract of the CEO; and (x) enter into any agreement or assignment with a shareholder or its immediate family member or any entity controlled by a shareholder and/or its immediate family member(s).
Board of Directors: The Founders shall elect [three] of the directors. The Lead Investor shall elect [one] of the directors. [The other Investors shall elect [one] of the directors.]
Right of First Refusal: Transfer of shares in the Company is subject to other shareholders’ right of first refusal. A customary redemption clause shall be included in the Company’s articles of association.
Drag-Along: In the event holders of more than [50]% of the Shares accept an offer to sell or otherwise transfer their shares to an independent bona fide third party, all other shareholders consent to sell or otherwise transfer their shares on the same terms and conditions as the majority shareholders who have accepted the offer.
Tag-Along: The shareholders shall have the right to participate in any sale or other transfer of shares in the same proportion and on the same terms and conditions as offered to the selling shareholder.
[Expenses:] [The Company shall reimburse counsels to the Investors for fees, which shall not exceed DKK [amount]. If there is no investment, each party shall pay its own fees.]
Vesting: Shares held by the Founders will vest over four years (the “Vesting Period”) as follows: 25% to vest one year after closing and the remaining 75% to vest in equal monthly installments under the following 36 months. During the Vesting period, the Founders may not transfer their shares without the consent of the Lead Investor. During the Vesting Period, any unvested Shares of a Founder who leaves the Company may be purchased by the other shareholders pro rata at (i) quota value if the Founder is a ”bad leaver”, or (ii) market value if the Founder is a ”good leaver”.
Non-Compete and Non-Solicitation: Each Founder is required to sign a non-competition and a non-solicitation commitment, valid until one year from the date he/she ceases to be a shareholder in the Company.
Intellectual Property: The Founders and the Existing Shareholders shall assign all relevant intellectual property to the Company.
Warranties: Each Founder shall severally and not jointly give standard warranties to the Investors, including warranties on title, intellectual property and complete information.
Confidentiality: This Term Sheet and the contents hereof are confidential to the Founders, and they may disclose these terms only to their representatives, directors and their legal or financial advisors.
Closing: Expected closing date is [date]. Definitive agreements will be based on documents published at www.startuptools.org.
[Exclusivity:] [The Founders agree not to discuss or accept any financing of the Company from other parties before the expiry of the Term Sheet, except as approved by the Lead Investor.]
Non-Binding Effect: This Term Sheet is not legally binding, with the exception of this paragraph and the paragraphs entitled [Expenses, Exclusivity and] Confidentiality, which shall be construed according to the laws of Denmark.
Expiration: This Term Sheet expires on [date].

For the complete version of the term sheet, please download the document below.

/Erik Byrenius

Term Sheet

Our term sheet is a balanced and standardized term sheet for your seed round. Both VC firms, angel investors, entrepreneurs and lawyers have been involved in the process of creating this new Nordic standard.

What is a Term Sheet?

Use a term sheet in discussions with investors. When you have agreed on everything, you can choose to sign the term sheet (most of it is non-binding anyway) or just move straight on and translate it into a subscription agreement and shareholders’ agreement.

The term sheet is not binding for anyone (except the clauses expensesconfidentiality and, when used, exclusivity). It might sound strange, but the term sheet is more like a declaration of intentions than a contract. Usually, when a term sheet is agreed upon, the deal will actually close, but that’s not guaranteed. Things can go bad during the due diligence and the investor can pull out, or ask for new terms.

This does not mean that the term sheet is not important. Unless something significant happens after the term sheet is agreed upon, the deal will happen and you are (at least morally) bound to the terms mentioned in the term sheet. Make sure that you are willing to commit to everything in the term sheet; don’t assume that you can discuss the details later.

The subscription agreement and the shareholders’ agreement contain a lot more details than the term sheet but those details are usually of minor importance compared to what is brought up in the term sheet. Hence, if there are other things that are very important to you, make sure you mention them in the term sheet as well.

After you have agreed on the term sheet (signed or not), the investor will start the final parts of the due diligence while the subscription agreement and shareholders’ agreement are drafted. When the due diligence is complete it’s time to sign the subscription agreement and shareholders’ agreement.

Further Reading

For explanations of the terms in the term sheet, please read the comments in the downloadable file. If you then have even more questions regarding the terms, especially regarding how investors reason, there is a great book, Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist, explaining different terms in term sheets in a thorough and pedagogical way.

Also, if you need help with managing your cap table, please see the blog Venture Hacks. They have created a flexible template for organizing your cap table and calculating how option pools end convertible debts affect your shareholding and valuations. The document is quite complicated but includes everything you need for your cap table. You can also use the online service captable.io which is very powerful (and free!).

Standard Terms

This is a summary of the complete term sheet that you can download below. The text within [square brackets] is optional and/or should be edited.

Securities to Issue: Ordinary shares of the Company (“Shares”).
Investment Amount: DKK [amount] in aggregate.
Investors: [Company Names, Company ID Numbers] (“Investors”).
Lead Investor: [Company Name, Company ID Number] (“Lead Investor”).
Founders: [Company/Personal Names, Company/Personal ID Numbers] (“Founders”). In this Term Sheet, “Founder” may refer to a company and/or the physical person in control of such a company.
Existing Shareholders: [Company Names, Company ID Numbers].
Subscription Price: The price per each Share (the “Original Subscription Price”) is based on a Company pre-money valuation of DKK [amount].
Capitalization: The Company’s capital structure before and after the completion of the investment is set forth in Exhibit A.
[Option Pool:] [The parties agree and acknowledge that the Company, after the investment, will issue warrants to current and future key employees, corresponding to up to [10-15]% of the shares in the Company post-money.]
[Liquidation Preference:] [Upon a liquidation, merger, sale or other type of transaction in which control in the Company or substantially all of its assets are transferred, the Investors shall receive, per held share, the higher of (i) one times the Original Subscription Price or (ii) the amount they would receive if all shareholders received their pro rata share of such assets or proceeds. The remaining proceeds shall be distributed to the Founders and the Existing Shareholders on a pro rata basis.]
Financial Information: The Lead Investor will receive standard information, including but not limited to monthly reporting of key business metrics and a summary of the Company’s financial status. The other Investors will receive quarterly financial reporting.
Participation Right: The Investors will have the right, but not the obligation, to participate in subsequent issuances of any equity securities on a pro rata basis.
Protective Provisions: Approval of the Lead Investor is required to (i) amend the articles of association; (ii) issue, redeem or purchase shares or other equity securities; (iii) adversely change rights of the Shares; (iv) declare or pay any dividend or make a decision on other asset distributions; (v) guarantee any indebtedness, save for trade accounts of the Company, or incur any indebtedness in excess of DKK [amount]; (vi) merge, demerge, liquidate or dissolve the Company or a subsidiary; (vii) transfer, lease, license (other than licenses granted in the ordinary course of business on a non-exclusive basis), pledge or encumber assets or rights material to the Company; (viii) materially amend the business plan; (ix) hire, fire or amend the terms of the employment contract of the CEO; and (x) enter into any agreement or assignment with a shareholder or its immediate family member or any entity controlled by a shareholder and/or its immediate family member(s).
Board of Directors: The Founders shall elect [three] of the directors. The Lead Investor shall elect [one] of the directors. [The other Investors shall elect [one] of the directors.]
Right of First Refusal: Transfer of shares in the Company is subject to other shareholders’ right of first refusal. A customary redemption clause shall be included in the Company’s articles of association.
Drag-Along: In the event holders of more than [50]% of the Shares accept an offer to sell or otherwise transfer their shares to an independent bona fide third party, all other shareholders consent to sell or otherwise transfer their shares on the same terms and conditions as the majority shareholders who have accepted the offer.
Tag-Along: The shareholders shall have the right to participate in any sale or other transfer of shares in the same proportion and on the same terms and conditions as offered to the selling shareholder.
[Expenses:] [The Company shall reimburse counsels to the Investors for fees, which shall not exceed DKK [amount]. If there is no investment, each party shall pay its own fees.]
Vesting: Shares held by the Founders will vest over four years (the “Vesting Period”) as follows: 25% to vest one year after closing and the remaining 75% to vest in equal monthly installments under the following 36 months. During the Vesting period, the Founders may not transfer their shares without the consent of the Lead Investor. During the Vesting Period, any unvested Shares of a Founder who leaves the Company may be purchased by the other shareholders pro rata at (i) quota value if the Founder is a ”bad leaver”, or (ii) market value if the Founder is a ”good leaver”.
Non-Compete and Non-Solicitation: Each Founder is required to sign a non-competition and a non-solicitation commitment, valid until one year from the date he/she ceases to be a shareholder in the Company.
Intellectual Property: The Founders and the Existing Shareholders shall assign all relevant intellectual property to the Company.
Warranties: Each Founder shall severally and not jointly give standard warranties to the Investors, including warranties on title, intellectual property and complete information.
Confidentiality: This Term Sheet and the contents hereof are confidential to the Founders, and they may disclose these terms only to their representatives, directors and their legal or financial advisors.
Closing: Expected closing date is [date]. Definitive agreements will be based on documents published at www.startuptools.org.
[Exclusivity:] [The Founders agree not to discuss or accept any financing of the Company from other parties before the expiry of the Term Sheet, except as approved by the Lead Investor.]
Non-Binding Effect: This Term Sheet is not legally binding, with the exception of this paragraph and the paragraphs entitled [Expenses, Exclusivity and] Confidentiality, which shall be construed according to the laws of Denmark.
Expiration: This Term Sheet expires on [date].

For the complete version of the shareholders’ agreement, please download the document below.

/Erik Byrenius

Download

Support

Focus on running your business, instead of spending time and money on unnecessary legal paperwork and negotiations. Help us keep StartupTools free by making a donation.