The creation of a company requires investments. Sometimes, the support of an investor is thus indispensable.
But beware: the amount an investor offers can blind the entrepreneur! His vigilance with regard to the terms of the contract decreases and can put him at a disadvantage in controlling his own company!
But remain assured: you can keep control of your company while having investors! The Lawrence team explains your possibilities:
- The bridge-loans
Bridge-loans make it possible to invest in a company without immediately acquiring shares. The investor will not invest directly in the capital and will therefore not be a shareholder.
Thus, you will be able to offer him a return on investment in shares or with a tangible amount. The entrepreneur is therefore not obliged to grant control of the company to the investor in exchange for his contribution.
- The share with preferential voting rights
In principle, 1 share = 1 vote in a company. The more a shareholder contributes, the greater is his or her weight in the control of the company.
This can be changed through the share with preferential voting rights. The shares will then have different values.
The preferred voting share makes it possible to keep the majority of the votes, even if the shares in the company are smaller.
All in all, it’s a great way to have control over your company, while benefiting shareholders at the same time!
However, this share does not apply under certain conditions, such as when voting in conjunction with the auditors or another supervisory body. It must be in registered form and fully paid up. Finally, it may only reach a maximum of 10 times the single value.
- Negotiate, negotiate, negotiate!
We can never say it enough. Whatever your situation, you will need to be prepared to negotiate your shares. This also applies if you intend to use the bridge loans and/or the preferred voting shares.
In this type of negotiation, you will have to do everything you can to ensure that you control your company without giving too many rights, or shares, to the shareholders.
Your negotiating style will depend on your goals, your type of business and the investors you will be dealing with. Some will be more interested in overseeing the operation of the corporation than others.
Negotiation thus plays the primary role in a corporate control scenario. Having a lawyer can be a great help: you will benefit from his or her knowledge, advice and experience.
Nothing (or almost nothing) is impossible if you are well prepared!
Do you want to ensure control of your company in the face of tough investors? Lawrence will assist you at every stage of the negotiation process!