Shareholder Agreements: Prevent Disputes Before They Happen
A robust shareholder agreement is more than a box-ticking exercise—it's a proactive tool to protect your business relationships and long-term interests. Whether you're a founder, investor, or executive in a growing business, this agreement can be the difference between smooth sailing and a costly, time-consuming dispute.
Case Study: When Growth Gets in the Way of Clarity
We recently advised two co-founders of a high-growth tech startup. Following a successful Series A funding round, their business value surged—but tensions quickly emerged. One founder believed they were entitled to a larger stake due to recent work contributions; the other felt their original 50/50 split should remain. There was no formal shareholder agreement, just a vague understanding between friends.
When a potential investor raised concerns about the lack of clarity, the founders turned to us. We facilitated a full equity review, established vesting schedules based on future contributions, and created a structured shareholder agreement that clearly outlined roles, capital calls, dispute resolution pathways, and exit options. That agreement gave the investor confidence—and saved the co-founders from what could have been a major falling-out.
What could they have done differently?
Had a shareholder agreement been in place from the beginning, the founders could have avoided misaligned expectations altogether. Clauses around role-based vesting, founder obligations, and valuation metrics during capital raises would have made these conversations easier and less emotional.
What does a good shareholder agreement cover?
Voting rights, dividend policies, capital contributions, dispute resolution procedures, and exit strategies. It should also address what happens if a shareholder wants to leave, passes away, or can no longer contribute to the business.
Why it matters:
Misunderstandings between shareholders—especially in founder-led or family-owned companies—can derail even the most promising ventures.
Not sure if your agreement is still fit for purpose? We can review or help you draft one that supports your future goals.
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