Equity Crowdfunding Shareholders Agreement

April 9th, 2021 by

That is why, in my opinion, any company considering investing in crowdinvesting should at least consider a shareholders` pact to make investments in the future (although shareholder agreements are not discussed in detail here, there is a previous blog post on this subject that you can read here). Shareholder agreements are usually fairly complex legal documents, and if you only arrive at limited volumes of money or limited investments per crowdfunding investor, long-term legal documents can discourage potential investors. In this case, you will need a full shareholder pact with the founders and other major shareholders and a separate and limited company, which is required of the crowd investors. Such a participatory investment enterprise would cover only the most important provisions, including restrictions on transfers, drag-along provisions and procedures for new investments, and perhaps even a derogation from certain minority rights. Some obligations may be “qualified” by some shareholders or by a majority described as shareholders, as described in more detail in the company. While compliance with the shareholders` pact is preferred by all shareholders, the commitment mechanism described above may be sufficient to meet the requirements of the PCcs in future funding rounds. Since CSF`s investors appear individually on the board, they are very numerous minority investors. Let`s take an example where you want to increase 20% new equity. This 20% could come from an investor or a hundred investors. The difference is that the hundred or so investors are all very small minority investors with minimal influence on your business (average participation of <0.2%). They are probably passive and cannot even vote on issues at shareholder meetings because they have such a small share.

One of the investors with 20% on the other side will probably have an appropriate influence and may want to have more participation. An investor with a large holding company might even want to participate in the day-to-day strategy of the company and can create added value in this regard, although it may also hinder. It is a question for companies to know what type of investor they prefer, although the two can co-exist. Example below in the hypothesis, that the company absorbs 5-20% of the new equity (almost standard for CSF post-seed series A): In addition to preparing our social media properties for the offer, we have also maintained the services of a financial public relations company (Leverage PR in our case) to help us produce and distribute our press releases and help us develop and implement a PR de-force strategy for the duration of the crowdinvesting tour. Then there is the subscription contract – the sheet of paper that must be signed by any purchase shareholder that usually contains other commitments. These can also be linked to your Constitution and collected through the crowdfunding platform. a transaction in which the shareholders of Investee, including the nameholder on behalf of the investor, are required to sell certain shares they hold, in accordance with the constitutional documents of Investee Company, the terms of a subscription contract or other agreements relating to the investment in Investee Company or any law or rule of which the Investee company is subject (a transaction of “exit transaction”); or the investor affiliation agreement between the investor and SeedTribe Limited; We prefer this approach because, unlike a shareholders` pact, new shareholders are automatically bound by the terms of a company`s by-law, which means that there is no need to act for candidates. Finally, you should be aware of the circumstances in which the exceptions granted to your business by the crowdfunding system no longer apply.

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