StartupTools has developed three versions of our Shareholders’ Agreement (SHA). Each of them caters for particular situation or stage a startup might find itself in throughout its life and growth cycle.
Our Three Versions
Without Investors (/Founders Only) – The one to use when you are just starting up and have no external shareholders at all. This was previously called the “Founders’ Agreement” but we renamed it to “Shareholders’ Agreement Without Investors” to avoid some recurring confusion.
With Small Investors – The one to use when you have come a little further, and the time has come to bring in some small scale funding. This is suitable to use when you find an angel investor or let FFF (friends, fools & family) into your cap table.
With VC Lead Investor – The one to use for scaling up with VC funding. Congratulations on getting this far – truly well done! This SHA is suitable when you are doing an investment round and have one main investor (often but not necessarily a VC). It is also equipped with tools for smaller investors joining in.
The most common order of using these is Without Investors -> With Small Investors -> With VC Lead Investor. There is however nothing in them that means you must do this. It works equally well to begin with either that suits your current needs and go from there.
Why use our sequence of SHAs?
We aim to provide a complete system of investment tools (both documents & instruments) for startups which are compatible and support each other. By using these SHAs in sequence rather than taking on a new framework for each stage you gain a few smart wins:
- Standardised format & terms – Many investors and entrepreneurs are familiar with our standard and documents. Using them will lay the groundwork for smooth transactions and allow everyone to focus on negotiating the actual deal rather than scrutinizing small print and trying to understand new difficult legal setups. Please take care to read everything thoroughly though, these are very important documents
- No collision between versions – Using the same suite of SHAs also means you will not have to handle collisions as a result of different frameworks. If you change the format completely when you replace the SHA you might have to find solutions for how to translate the original terms fairly. This can lead to lengthy (often nightly) negotiations and discussions – at a time when you really want to stay sharp and close the deal with your new potential investors
- Part of a coherent system – When we develop new tools, such as WISE or SWEAT (currently Sweden only), or release other documents we take care to make them compatible, avoiding any potential collisions
- Adapted for startups – These SHAs are particularly calibrated for the needs of modern, online, high paced startups. They adress what may arise in this type of environment and avoid other lengthy irrelevant parts which will just cost time and money to process
Read more about our StartupTools Standard and download the documents!