The Difference Between Private Equity and Venture Capital
Venture capital usually targets early-stage startups with higher risk and expected greater returns, while private equity often invests in more mature companies with a proven business model, and this difference affects the nature of contractual terms expected in each type of investment.
Drafting Investment Round Agreements
We help founders draft investment round agreements balancing their funding needs with investor requirements, including valuation terms, granted voting rights, and liquidation preference upon exit or acquisition.
Anti-Dilution Protection Rights Across Subsequent Rounds
We help early investors understand and negotiate anti-dilution protection rights protecting their ownership percentage when new investors enter subsequent funding rounds, balancing this protection with founders' interest in not restricting future rounds.
Founders Agreements and Vesting Schedules
We help founding partners draft an agreement defining equity distribution and a vesting schedule protecting the company if a founder departs early, fundamental clauses protecting the startup's stability.
The Board of Directors and Investor Oversight Rights
We help design a board structure granting investors reasonable oversight rights over fundamental decisions without excessive interference in daily operational management, which should remain with founders.
Employee Stock Option Programs (ESOP)
We help startups design stock option programs attracting and retaining talent without excessively diluting founders' and early investors' stakes, an essential tool for competing for talent in the job market.
Acquisitions and Exits for Investors
We help founders and investors structure acquisition deals or initial public offerings as an exit path, achieving the best possible return for all parties while complying with each path's regulatory requirements.
Disputes Between Founders and Investors
When disagreements arise over company management or strategic decisions, we help resolve the dispute in a way preserving the company's continuity, resorting to litigation only when an amicable resolution within the existing governance structure is impossible.
Structuring Successive Funding Rounds
We help startups structure successive funding rounds in a way maintaining balance between founders' and new and existing investors' stakes, accounting for each round's cumulative effect on ownership and control percentages in the company.
How We Start With You
Send us your current funding round stage or your startup idea on WhatsApp. We help you build on a solid legal foundation protecting your vision and all parties' interests throughout the growth journey.
Frequently Asked Questions
One of my co-founders wants to leave after only six months. Do they keep their full equity stake?
It depends on whether a vesting schedule exists in the founders agreement; if so, they are only entitled to the portion actually earned up to their departure date.
An investor is requesting anti-dilution protection in every future funding round. Is that a standard term?
Common in some cases but it can restrict you significantly in later rounds, and we help you negotiate a narrower scope balancing both parties' interests.
We are planning to design a stock option program for our early employees. What is the typical percentage allocated to this program?
It varies with the company's stage and team size, and we help you design a program balancing employee incentives with protecting founders' stakes.
A major company wants to acquire our startup. What is the most important clause to review in the offer?
The deal structure (cash or stock) and the return distribution mechanism between founders and investors matter most, and we help you assess the offer precisely.
An investor is interfering in day-to-day operational decisions despite the contract not providing for that. What are our options?
We review the shareholders agreement to determine the actual scope of their authority, and help you set clear boundaries protecting executive management independence.
What's the difference between private equity and venture capital investment in terms of expected terms?
Venture capital targets earlier stages with higher risk and usually more flexible terms, while private equity invests in more mature companies with more conservative terms.
We're preparing for a second funding round, which means diluting first round stakes. How do we manage this balance?
We help you structure the new round accounting for the cumulative effect on ownership and control percentages, ensuring fair balance among all parties.