fbpx

EP #54 – Boris Räber & Alexander Eichhorn: Legal Advice For Later-Stage Startups

We'd like to get your constructive feedback on this episode. What did you find insightful? What did you not like? What can we do better?

Shownotes

EPISODE #54: BORIS RÄBER & ALEXANDER EICHHORN (MANAGING ASSOCIATES AT WALDER WYSS)

Timestamps

1:58 – From a legal aspect, what scaling mistakes do Swiss startups make repeatedly?
10:30 – Convertible loans or capital increase?
21:21 – How to handle non-compete clauses
33:10 – What startups should me more aware of
38:14 – Taxes for startups

The Episode in 60 Seconds

Just like your apartment, your company needs some basic housekeeping in order to avoid descending into chaos. 

Financing rounds

  • It’s not advisable to negotiate your term sheet without a lawyer if you don’t have previous experience. Although they aren’t legally binding they set a strong precedent which is hard to negotiate your way out of.
  • By the same token, don’t use the template of your investor.
  • Be sure you understand the liquidation preferences you agree to
  • If fundraising has to be fast and determining a price is difficult, consider a convertible loan 

Employment contracts

  • Watch out for IP (intellectual property) rights, notice period and non-compete clause (limit 3 years)
  • For employee incentivisation, you can decide between
    • Share plan: more tax friendly for your employees, usually higher administrative burden for the company
    • Phantom stocks: easier to administer but taxed as income

Exit

Exits usually take the form of either an M&A (Merger and Acquisition) or an IPO (Initial Public Offering)

  • M&As come in 2 forms:
    • Asset deal: meaning you sell all the companies assets, including employees to a new owner
    • Share deal (more common): the acquiring party buys a majority of the shares and therefore takes control of the company.
  • IPO: are still rare in Switzerland, mostly because they involve large costs (several $ millions) for preparing the so called “prospectus”, the document based on which the shares are offered on the stock exchange.

 

Newsletter

Get updates and access to exclusive content. We’ll never share your email address or spam you.

We use Mailchimp as our marketing platform. By clicking above to subscribe, you acknowledge that your information will be transferred to Mailchimp for processing. Learn more about Mailchimp's privacy practices here.