The “anti-dilution” version, which most outside investors enjoy, is commonly referred to as a “complete crater.” In this scenario, outside investors are able to buy additional shares of the company if they run the risk of reducing their share of ownership to the lowest price ever offered. Tom and Sarah have finally found the right investor. Tom calls the VC to tell him about a few numbers, and on the phone, Tom informs the VC that he will probably have a saying in the start-up`s operating strategy. Even in a non-formal interview, you have to be very careful when expressing commitments and agreements. If Tom wants to make his promise, he`ll lose his credibility and the trust of the VC. The negotiation process will slow down, and we all know that this is not the best scenario… Our updated safes are post-money safes. By “post-money” we say that the safe owner is measured by post, all the safe money is accounted for – which is now his own trick – but before (before) the new money in the price cycle that transforms and dilutes the coffers (normally series A, but sometimes the Seed series). The post-money safe has what we think is a great advantage for founders and investors – the ability to calculate immediately and exactly how much property the company has been sold. For the founders, it is essential to understand how much dilution is caused by each chest they sell, just as it is fair for investors to know how much they have bought ownership of the business. The first theme is the general governance of the startup: what control rights are assigned to whom (at the management level of the company and at the level of the shareholders of the company)? Will there be a leader or will a tailor-made solution be possible? Suppose Tom and Sarah are co-founders (shareholders) and managers of a startup.

Sarah is a creative girl who is good at sales. Tom, a financier, is extremely talented in costing. Sarah and Tom agree that in terms of expertise and talent, they want a firmer vote on several decisions related to Sales marketing and finance, respectively. You have to agree on who knows what. What types of agreements should you enter into to register your legal relationship with the company, with each other and with each other`s startup participants as soon as you form your start-up management team? To define legal relationships, investors, shareholders and founders may require distinctive agreements. Let`s turn the world around and say you`re an investor. Would you prefer 25% google shares or 90% shares in a startup that started only 2 months ago? In the case of an investment contract, the individual must not be a new shareholder, but may be a shareholder or an external investor. If the founders trust each other and hold shares together sufficient to meet these fundamental thresholds, they can probably limit their shareholders` pact to a few key elements. P.S.: Did you know that The Factory helps you optimize your financing strategy? We accompany you every step of the way: from evaluating startups to negotiating appointment sheets. Click here for more information! >In conjunction with a shareholders` pact, a shareholder decision indicates how to continue to enforce shareholder action.