Startup Tips

6 Conversations to Have With Your Co-Founders Before You Incorporate

A great demo proves your technology works. A founding team that holds together proves your company will. Most founder fallouts have nothing to do with the tech. They trace back to assumptions about vision, roles, money, and commitment that nobody put on the table while things were still easy.

The Founders’ Assessment is a short questionnaire built to […]

Selling Your Business: Six Critical M&A Decisions, Part 6

For many business owners, signing the transaction documents feels like the finish line.

The buyer has been selected. Due diligence has been completed. The purchase price has been negotiated. The definitive agreements have been signed.

The deal is done.

Or so it appears.

In reality, one of the most important aspects of any transaction concerns what happens after closing if something turns out not to be true.

What if a […]

Selling Your Business: Six Critical M&A Decisions, Part 5

When business owners receive an acquisition offer, attention naturally gravitates towards a single number.

The purchase price.

After years of building a business, creating jobs, taking risks and investing capital, it is entirely understandable that valuation becomes the focal point of discussions.

Yet one of the most important lessons in M&A is that valuation and value are not necessarily the same thing.

Experienced dealmakers know that two offers can […]

Selling Your Business: Six Critical M&A Decisions, Part 4

You have selected a buyer.

The principal commercial terms have been agreed. A term sheet has been signed. Exclusivity is in place.

At this stage, many sellers believe the transaction is largely on track and that the remaining steps are primarily procedural.

In reality, one of the most important phases of the entire transaction is only just beginning.

Due diligence sits at the heart of virtually every M&A transaction. […]

Selling Your Business: Six Critical M&A Decisions, Part 3

For many business owners, receiving an offer from a prospective buyer is an exciting milestone.

Month, or sometimes year, of preparation may have culminated in meaningful discussions with potential acquirers. A preferred bidder has emerged. Commercial discussions have progressed. The buyer now presents a letter of intent, indication of interest or term sheet outlining the proposed transaction.

At this stage, many sellers make a critical mistake.

They focus […]

Selling Your Business: Six Critical M&A Decisions, Part 2

When business owners begin considering a sale, one of the first questions is often:

“Who is likely to buy my company?”

The answer may seem straightforward. Many owners instinctively assume that a competitor, supplier or larger industry participant will be the natural acquirer.

In practice, however, the universe of potential buyers is often much broader.

Depending on the sector, size and growth profile of the business, potential acquirers may […]

Selling Your Business: Six Critical M&A Decisions, Part 1

For many founders and business owners, selling a company is one of the most significant transactions of their professional lives.

Whether it is a family-owned business built over several decades, a rapidly growing technology company, or an entrepreneur’s first successful venture, a sale represents the culmination of years of effort, investment and risk-taking.

Yet despite the importance of the event, many sellers only begin preparing when they […]

EMBARK.LAW founder Michel Kertai interviewed by Legalcommunity.ch

Convertible loan agreements (CLAs) are a top choice for financing Swiss startups. They offer a way to secure funding without lots of paperwork or having to negociate the company’s value right away.

However, CLAs can bring some tax risks. The biggest one is the “10/20 non-bank rule”. Not following this rule can lead to unfortunate tax disadvantages (withholding taxes and income taxes on interest & discount).

To help you understand the tax challenges in your CLA financing rounds, we’ve created the below flowcharts and […]

No. 1: Company name (“Firma”)

For the commercial register to accept your chosen company name, it needs to be free (i.e. not already taken) and meet certain requirements – for example, it shouldn’t misrepresent what the company does.

We recommend to also check if your company name can be freely used as a trademark. Otherwise, you might not be able to use it as a brand without infringing on somebody else’s trademark rights.

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Why your startup should be an AG instead of a GmbH if you plan on raising venture capital

In Switzerland, founding an AG is costly – not least because AGs have a high minimum capital requirement of CHF 100k (50k need to be paid in at founding). It’s easier to come up with the CHF 20k required to start a GmbH.

But if you plan on raising venture capital, an AG is the better choice than a […]

Who Gets How Much When a Startup is Sold?

Startups usually depend on financially strong partners to grow. During financing rounds, investment agreements are concluded, and liquidation preferences are often one of the major deal terms to be negotiated. They are THE main feature of preferred shares (versus common shares allocated to founders and employees) investors can (and in most cases should) negotiate for.

A liquidation preference is the formula that defines who is paid first and who gets how much money when the […]