StartupTalk #33: Shareholders' Agreements 101 - Slides by Legal Director Jonatan Hjortdal from PreSeed Ventures.

1. StartupTalk #33:
Shareholders’
Agreements
P
S
V
PreSeed Ventures 2021

2. PreSeed Ventures
Legal Director
+45 25245100
jhj@preseedventures.dk
Background:
Work Experience:
• Legal Director, PreSeed Ventures
• Partner, LegalHero
• Attorney-at-law, Lundgrens Lawfirm
• Attorney-at-law, Bruun & Hjejle Lawfirm
• Junior Associate, Bruun & Hjejle Lawfirm
• Junior Associate, Bech-Bruun Lawfirm
Education:
• Master of Laws, University of Copenhagen,
University of Fordham, School of Law and
London School of Economics and Political
Science
Jonatan Hjortdal
StartupTalk #33 – Shareholders’ Agreements
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3. PreSeed Ventures StartupTalk #33 – Shareholders’ Agreements
3
01
Shareholders’
agreement – what &
why
02
Checklist for your
shareholders’
agreement (before VC
investment)
03
Doing shareholders’
agreement with a VC
Agenda

4. PreSeed Ventures StartupTalk #33 – Shareholders’ Agreements
4
01
Shareholders’
agreement – what &
why
02
Checklist for your
shareholders’
agreement (before VC
investment)
03
Doing shareholders’
agreement with a VC
Agenda

5. PreSeed Ventures
What is a shareholders’ agreement and
why do I need it?
o A shareholders’ agreement is an agreement between the shareholders of a company.
o The purpose of the shareholders’ agreement is to protect the shareholders’
investment in the company, to establish a fair relationship between the shareholders
and to govern how the company is run.
o It also allows shareholders to make decisions about what outside parties may become
future shareholders and provides safeguards for minority positions.
o Sometimes the shareholders’ agreement are called a “divorce document” too – it lays
down the process in case of disputes
o In the eager to embark on the venture journey lots of founders forget to conclude a
shareholders’ agreement – which can be fine as long as the founders are in total
agreement of everything.
o But what happens when you disagree in the founder team, things get messy, and you
don’t have any contractual framework to help you solve the dispute and outline the
process going forward?
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6. PreSeed Ventures
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7. PreSeed Ventures StartupTalk # 33 – Shareholders’ Agreements
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Having no shareholders’ agreement can cause great
harm to your company!
In case of no shareholders’ agreement, you must rely
on The Danish Companies Act which, among other
things, entails that:
- A party with a 33,4 majority of the votes can veto
changes in the articles of associations
- A party cannot be forced to sell his or her shares
- No regulation if a founder stops working or resigns
his or her position with the company (the shares are
kept)
- No regulation if a founder does not work as much as
expected
- No limitations as to competitive activities if a
founder stops working or resigns his or her position
with the company.

8. PreSeed Ventures
Getting a shareholders’ agreement is business
critical!
o It is market standard to have a shareholders’ agreement – it is simply too uncertain
and risky not to.
o You should discuss and conclude you shareholders’ agreement as soon as possible
after the incorporation of your company with partners or as soon as possible after
accepting new shareholders in your startup.
o “One size fits all”-agreements rarely work out the way they are contemplated when
things go wrong – consider to ask your lawyer to draft up your shareholders’
agreement in order to customize it from the beginning.
o Keep it simple at the beginning – it will get more complex down the road anyway,
especially when you take in investments from business angels and VC’s.
StartupTalk #33 – Shareholders’ Agreements
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9. PreSeed Ventures StartupTalk #33 – Shareholders’ Agreements
9
01
Shareholders’
agreements – what &
why
02
Checklist for you
shareholders’
agreement (before VC
investment)
03
Doing shareholders’
agreement with a VC
Agenda

10. PreSeed Ventures
Checklist; what do I need to consider when drafting my first
shareholders’ agreement with my fellow founders?
StartupTalk #33 – Shareholders’ Agreements
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Capitalization
How much capital is the company
incorporated with? Are founders required
to fund the company beyond this?
Management
How is the company operated? How
many managers are there? Does the
company have a board of directors?
Work obligation
of founders
Are the founders all full-time on the
project? Are the founders allowed to sit in
boards and do other stuff on the side?
Right of First
Refusal
What happens if one of the founders
wants to sell his or her shares? Is there a
right of first refusal for the others, what is
the price of the shares, etc.?
Non-
competition
What happens if a founder terminates his or
her position (or is terminated by the
company)? Can the founder start a new
company doing the exact same thing?
Breach
How is it handled if a founder is in breach
of his or her obligations towards the other
founders or the company?

11. PreSeed Ventures StartupTalk #33 – Shareholders’ Agreements
11
01
Shareholders’
agreements – why &
why
02
Checklist for your
shareholders’
agreements (before VC
investment)
03
Doing shareholders’
agreement with a VC
Agenda

12. PreSeed Ventures
Doing shareholders’ agreement with a VC
StartupTalk #33 – Shareholders’ Agreements
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o Taking in your first VC investment typically means that the VC will negotiate a new
shareholders’ agreement with you.
o The VC leading the round will most likely present you to their standard documents
revised in accordance with the term sheet.
o As many of the terms in the shareholders’ agreement are agreed upon in the term
sheet, you should give the negotiation of your term sheet a lot of effort. It is not
considered comme il faut to negotiate on something agreed upon in the term sheet.
o Is it even possible to negotiate with a VC or is their shareholders’ agreement a “take
it or leave it”-deal?
o Taking in a VC entails that your setup is getting (more) professionalized and that is
reflected in the shareholders’ agreement.

13. PreSeed Ventures
Doing shareholders’ agreement with a VC
StartupTalk #33 – Shareholders’ Agreements
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Pre-emption
rigths
A VC will require pre-emption rights in
order to maintain target ownership.
Warrant pool /
ESOP
In order to make it easy to attract
talented employees a warrant pool
needs to be allocated.
Founder lock-
up
VC’s invest in the team! As such, we are
locking you – the founders - up in the
company to secure our investment.
Key Person
Clause
Goes hand-in-hand with the lock-up -
our way to secure that you do not leave
the company after we invested.
Tag along /
drag along
Tag along: If you sell, we can co-sell.
Drag along: If majority wants to sell, the majority
can force the minority to co-sell on similar terms.
Investor
information rights
Establishment of a board typically comes with
a VC – we require information and reporting to
be able to track your performance.

14. PreSeed Ventures preseedventures.dk
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