While many companies with multiple shareholders have shareholder agreements, a shareholder contract is of the utmost importance to startups. Since external investors generally hold only a minority of the business, they need additional assurance that the business is managed as agreed. Since the founders are the most important element of a start-up start-up, their rights and responsibilities should be clearly defined, especially in unfortunate but sometimes unavoidable situations. The nature of the investment agreement you need depends on the nature of the transaction. The table below shows different types of investment transactions and the investment agreement associated with them. It is typical that the closing conditions are linked to each subsequent investment tranche. These measures are frequent: these are the measures to be taken after the completion of the first tranche of investment: the drag-along sales clauses are aimed at guaranteeing effective outflows. Drag-along means that if there is an offer to purchase all shares of the company and a sufficient majority has approved the offer, the other shareholders must accept the offer on the same terms. Thus, these shareholders are “dragged” into the agreement. All existing shareholders (and in particular the founders) and the company should be parties to the agreement, although it may be impossible for all minority shareholders to be non-partisan if there are many.
If the investment in a life sciences company is realized, with the exception of IP guarantees, the remaining guarantees in their application will be quite limited due to the company`s limited business history. IP guarantees in life sciences investments, regardless of the phase of the business, are, in most cases, more detailed and important than others, because of the value, breadth and complexity of the IP they own or the products they want to create and/or develop. Guarantees are likely to be even more important if a life sciences company goes through a second or second investment cycle. A shareholders` agreement is a contract entered into by the company and all its shareholders. It regulates the relationship between the company and shareholders. It also defines the framework for decision-making within the company. When the company asked investors for financial and financial support, it sought financing for a specific business idea and business plan. Of course, while plans can change over the life of a start-up, investors want to have some confidence that the founders are using the funds to implement the plans presented to investors during the financing cycle. The condition of majority decision-making should be taken into account in this context: these requirements are intended to ensure that in the event of a substantial change in the company or company, such a change requires sufficient support from all shareholders.