„Drag-along“: the „drag-along“ clause is very important for a fund and settles a case in which the venture capital fund, if it receives an offer from a third party in good faith, acquires 100% of the start-up`s shares, the rest of the shareholders being forced by the fund to transfer its shares to that third party. In addition to the Charter, a company regulates the performance of its affairs or the rights and powers of its shareholders, directors and officers in its statutes. The main difference between the Charter and the Statutes is that, as a general rule, a charter can only be amended by shareholders with the authorization of the stock, while the statutes can be amended by shareholders without the consent of the board of directors. Therefore, all provisions that you do not wish to change from shareholders should be included in the Charter. Finally, Crown corporation law may include additional governance requirements; z.B the vote necessary to conclude a merger. State law, the charter and the statutes together form the shareholders` contract on the management of the company. In some cases, such as private companies, shareholders may enter into an agreement that regulates their rights among themselves. In order to „block“ the investment, binding purchase contracts are prepared with the most important conditions of the investment. Investors (with the exception of the principal investor) sign a simple subscription letter confirming the amount of the investment per investor, the number and class of shares issued in return for the investment and the expected closing date of the cycle. VCs want to know who they`re going to sleep with (who aren`t!) and to be sure that company ownership can`t change significantly without their consent.
Founders and other major shareholders almost always have to accept certain transfer restrictions. The questions are to what extent the restrictions are strict and to whom do they apply? Since the party takes the financial risk, each investor will preferably seek economic (and sometimes voting- ) rights over the rights of existing shareholders (including the founders of startups). A substantial part of the provisions of each maturity sheet and the shareholders“ pact will aim to protect the investor`s investment and ensure that the investor can liquidate his investment under priority (and generally more favourable) conditions for both investors in the previous cycle and the start-up creator.