We are in early startup phase. One founder has a big majority stake and we are co-founders with small 5 minority stake. We have good relations and we are happy with the stakes, but we would like to get reasonable protection to the shareholders agreement in case things "go bad". We are based on European Law, where the majority shareholder can take over or squeeze out minor shareholders in case they have 95% or more of the stocks.
We will invest lot of time and energy to the project, we would like to be sure to get our portion of the growth of company value. I have been thinking of measures like:
* Minimum price (growing annually) of the stake in case the majority shareholder wants to push us out?
* Dilution - Unanimous voting would be required to issue new shares?
* Unanimous voting for business critical decisions - which ones should I consider?
What are your suggestions and experience, which other risks or protection should I negotiate and write into the SHA. I really appreciate your help and advice, thanks in advance :)
and welcome to this site.
Hmn, I'm having some trouble recalling all the provisions we used last I had this kind of issue. The following list may be incomplete. Under all circumstances, this is really a question I recommend you go talk with a professional about -- i.e. go see a good lawyer please.
+1 on Jesper of course.
I'm not familiar with European law, but in the States you typically have "Corporate Bi-Laws" which lay out how the business expects to behave. That would be another way to state expectations. If those are not met -- or even if the board (i.e. the majority holder) revokes them -- you have some recourse.
Another idea is to create a bloc -- set aside 6% (or whatever is past that "he can squish us" limit) and divide the bloc amongst yourselves. That way the majority holder can't exercise special rights.