Protecting You
The keys to protecting yourself from internal attacks are forming a strong company structure, establishing a water-tight yet fair sharesholder’s agreement, practicing good corporate governance within the board room and maintaining good board dynamics. Let’s go through these points one at a time.
To see an example of how important it is to protect yourself from internal attacks, read a recent post on how a well established franchise founder is facing revolt by Franchisees, click here.
Shareholders Agreement’s, By-Laws and Term Sheets
Before meeting with an investor to discuss your business, you need to know the in’s and out’s of your company’s shareholders agreement, your company’s by-laws and the backbone of a VC term sheet. Being prepared will ensure you maintain control of the conversation between your company and a potential investor.
- Your goal is to form a win-win deal between your company and an investor. Many VC’s now days require a minimum level of ownership in company’s which they invest, but their set level is often founded with little reason. To understand the thoughts behind ownership levels go to the post – Look for a Win-Win Deal
- To learn about drag-along and tag-along rights, read this post -Drag-Along and Tag-Along Rights
Corporate Governance
Corporate governance is the set of processes, customs, policies, laws, and institutions affecting the way a corporation is directed, administered or controlled. Corporate governance also includes the relationships among the many stakeholders involved and the goals for which the corporation is governed.
- Understand how shareholders can shape the company. Following the guidelines of your constitution (governed in Australia by ASIC) by giving due notice to shareholders for meetings and following enforceable voting levels will bring professionalism into your company - How Company Decisions are Made in Australia
