投資條件書,必爭之地是?(二)What should you fight for in your term sheet? Part II

[English version below]

PHOTO CREDIT: TAKASHI HOSOSHIMA VIA FLICKR

PHOTO CREDIT: TAKASHI HOSOSHIMA VIA FLICKR

談條件,確切時機和敏捷思考是重要的。身為創業家對於投資條件書內容必須要有基礎認識,與投資人接觸時才不會一直發生「額,我不知道,讓我回去再問問我們律師」當下無法應付的窘況。同時投資人也會審視創業家是否有做足功課,而拋出一些專有名詞、術語。整體來說,投資條件書主要由 2 個要素組成:控制(control)與經濟(economics),其中投資人又更重視控制。到底在幾張充滿著術語的條文大海裡,如何省時間找到最關鍵影響團隊權益的條款呢?根據投資人們分享過去實戰經驗,針對進行種子輪、A輪募資階段的新創團隊們,建立重點概念如下(延續前一章):

5. 保護性條款 Protective Provisions

當公司面臨重大決議事項時,投資人得以行使否決權來維護自己的利益。以下常見的談判重點:

  • 已發行特別股數要有最低門檻(Minimum threshold to maintain protective provisions )
    面臨重大決策如修改章程、撤換審計師、增資等重大事宜時,為避免公司在外流通的特別股剩下很少、甚至只有一股,而讓否決權集中在極少數人的狀況,新創公司最好要求,特別股要有一定數量時得以行使否決權。
  • 投票門檻(Voting Threshold)
    隨著越來越多輪的融資,不同階段的投資人相應有不同的持股比例,投資人會逐漸提高投票門檻,以確保自己的影響力。例如投資人先設定所有 A 輪融資特別股的 50% 為同意門檻,而後提升至 66.66% 或更高。
  • 分輪的保護性條款(Series protective provisions)
    當進行第二輪、第三或更多輪的融資時,`每一輪投資人會開始要求要有拆開的同意權。例如公司被併購時,需要分別徵得 A 輪、B 輪、C輪特別股東同意,決策才算通過。這對於新創團隊來說,會增加麻煩,過高的投票決議門檻。所以在談判時,最好能設定把所有特別股東一視同仁、全體過半就好。
  • 董事會保護性條款(Board level protective provisions)
    在美國東岸或在亞洲比較常見,大部分會加入這項。重大事項要求公司董事會過半同意,非特別股東,並且一定要該投資人所擁有之董事會席位的同意。在談判時要仔細衡量,例如,團隊佔 4 席、A 輪特別股東佔 1 席,即使團隊 3 席過半同意,只要 A 輪特別股東不同意,便無法執行。
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6. 優先承買及共售權 Right of First refusal and co-sale agreement

當創辦人或特別股股東要出脫手上股票時,通常投資人不希望整間公司的管理經營權落入第三人、不熟悉之人手上,因此會主張優先承買權。談判點有二:

  • 儘量縮減擁有優先承買權的人數。投資人會主張優先承買新創公司每一位創辦人所持有每一張出脫的股票。除了創辦人,承買對象甚至會擴及至公司重要管理階層人。新創公司可以設定並非所有特別股東都能優先承買,或一定要是特別股的大股東才能行使該權,否則未來公司經營管理權就會落到旁人手上。
     
  • 設定投資人無法優先承買的例外狀況。如創辦人設立家庭信託,在執行公司股票等資產轉移規劃時,投資人不能行使該權。

7. 優先認股權 Preemptive right

投資人面對未來下一輪投資時,為避免股權被稀釋,會要求維持一定的持股比例。例如 A 輪投資人持股 25%,要求將其加入下一輪投資,但投資金額按照目前持股比例計算。一般來說,比例分母應是特別股加上普通股所有總數,較為公平,而強勢的投資人則會行使權利,限制在所有特別股中其持股的比例。新創公司要注意,若特別股只有 1 人,其股權可能會提升到100%。

8. 強賣權 Drag-along right

當公司經營的很好,有買家願意出價想把公司買走。但基於很多原因,創辦人不太願意脫手,但投資人會覺得出價很好,想要趕快變現賣掉。這時候投資人會行使強賣權,只要特別股超過一半同意,則所有普通股投資人也將視同支持同樣的立場。

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「針對其他不重要的條件,不要花太多時間去鑽研。」美國與亞洲新創法律執業經驗豐富、現任立法委員的蔣萬安提到,「除了重要概念及相關數字之外,其他只要要求專業律師注意文字上是否有錯誤。團隊主力是放在公司的經營管理,融資當然很重要,可是不是最重要的。」


更多續集,請繼續鎖定觀看:
募資成功新創團隊的經驗甘苦談

本系列其他文章:
缺錢就要找創投?
盡職調查時,投資人看哪裡?
投資條件書,必爭之地是?Part I


關於 新創大補帖:投資條件書 (Crash Course:Term Sheets) 

早期科技新創團隊的生死存亡關鍵之一-資金!如何撰寫一份完整詳盡的財務計畫和募資策略,成為了重要課題。TSS 和 Spring Drive 於 2016 年 11 月 11 日至 13 日期間,共同邀請國際投資人們、以及財會法務專家、募資成功創業家等共 10 餘位黃金講師陣容,進行密集課程訓練,讓創業家們綜觀了解投資整體流程、投資人類型,並能依照不同團隊組織結構、成長現況及募資需求,進行投資條件書(term sheets)的演練。

本系列文出自 新創大補帖:投資條件書 (Crash Course:Term Sheets) 活動期間之節錄筆記,也敬請期待日後更多課程紀錄分享。歡迎追蹤 TSS 粉絲團 和 推特官方帳號 (或文章標籤 #CCTermSheets)。


When you’re at the table with investors, good timing and thinking quickly on your feet are critical skills in negotiating your terms. Having a basic understanding of the contents of a term sheet will prevent a situation where you need to say something like, “Um, I don’t know, but I’ll get back to you after talking with my lawyer.” Generally speaking, term sheets can be broken down into two elements: control and economics, with investors particularly focused on control. When you are looking through pages and pages of legal jargon, how can you save time by identifying the key terms that will impact your team the most? According to investors, here are a few of the most important concepts to grasp, especially early-stage startups pursuing seed financing or A rounds:

5. Protective Provisions

When the company is confronting important issues, investors holding preferred stock can use protective provisions, an ability to block company actions, to protect their interests. Startups should be aware of the most common negotiation points:

  • Minimum threshold to maintain protective provisions
    To prevent the possibility of only one or a few preferred stock holders with veto power making most of the important decisions for the entire company, startups should add the condition that veto power should be given to those only with a minimum number of outstanding shares of preferred stock.
  • Voting Threshold
    A voting threshold is the minimum vote by investors needed to bypass a protective provision. With more and more investment rounds, investors from different rounds will hold a different stake ratio. Therefore, some investors may raise the voting threshold, in order to secure their control on the company. For instance, investors may set the voting threshold for 50% of preferred stock in series A and then raise the bar to 66.66% or even higher after several investment rounds.
  • Series protective provisions
    When a startup goes into the second or third investment round, investors from every round may ask for separate approval rights. For instance, if the company is going to be acquired, it may need separate approvals from the shareholders in series A, B, and C. To startups, this will increase the complexity for its voting threshold. When negotiating, it is better to get every preferred stockholder across all investment rounds equally asking for a 50% voting threshold.
  • Board level protective provisions
    This regulation is more commonly seen in Asia and the East Coast of the US—Investors may ask for over half of the company board, rather than preferred shareholders, to agree on crucial issues. In addition, the agreement is only valid when the board seat represented by the investor also agrees. Think carefully: When the startup team is represented by 4 seats on the board, and the series A preferred shareholders have representation with 1 seat—as long as the series A board member disagrees, a motion cannot be approved.

 

6. Right of First Refusal (ROFR) and Co-sale Agreement

If a founder or preferred stockholder is selling her shares, the investors may not be willing to see the management power be given to an outside person or to someone whom they are unfamiliar. Therefore, the right of first refusal and co-sale agreement work together to allow investors to claim the privilege to buy those shares back or participate in the sale. There are generally two main points for negotiation:

  • The fewer amount of people with this right, the better for startups. The investors may try to buy every share from every founder of the startup company. In addition, the investors may also try to buy from every person at management level. Startups should consider this rule: not all preferred shareholders should own this privilege only the MAJOR preferred shareholders. Otherwise, the startup’s future management control will fall into other people’s hands.
  • Startups should also set exceptions to prevent the execution of this power. For example, if the founder is establishing his own family trust and needs to transfer the assets including the shares, investors should not be able to execute their power during this time.

7. Preemptive Rights

When facing the next investment round, investors may ask for preemptive rights, which allow investors to maintain a fixed ratio of the shares in all subsequent funding rounds to avoid dilution. For example, an investor who in the series A round holds 25% of shares may then ask to join the next investment round with the same share ratio of 25%. Generally, to be fair, the denominator of the ratio should be the total of the preferred stock plus common stock. However, an aggressive investor may try to limit the denominator of the ratio to the amount of preferred stock only. Watch out! If only 1 person holds preferred stock, it is possible that the ratio will go up to 100% in the next investment round.

8. Drag-along Rights

When the company is doing well and there is a buyer offering a deal for acquisition, the founder(s) may not be willing to sell while investors are considering to cash out. At this moment, the investor may execute the “drag-along” right, meaning as long as over 50% of preferred shareholders agree, the common stockholder side will be regarded as supporting the same opinion.

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In conclusion, “Don’t spend too much time figuring out other not-so-important conditions,” says Jiang Wan-An, a Taiwanese legislator with legal experience on startups in Asia and the US. “Fundraising is important, of course, but what the startup team needs to pay more attention to is the management and operation. Get the core concept and basic sense of numbers for negotiation, but then hire professionals to oversee the wording on the document and to do the rest for you.”



Stay tuned for the last installment in this series:
How do other companies complete their cross-boundary investment?

Other pieces in this series:
When you’re running out of money, is it time to seek VC funding?
What are investors looking for during due diligence?
What should you fight for in your term sheet? (Part I)

 


The content for this article has been primarily taken from Crash Course: Term Sheets, an intensive workshop co-hosted by TSS and Spring Drive. Get the upcoming articles in this series by following the TSS fanpage, TSS Twitter account and Twitter hashtag #CCTermSheets. The contents of this article, including all direct quotations, were originally in Chinese. All translations for the English version have been provided by TSS.