New Preferred Share Templates are now online

We have amended the Preferred Shares documentation. It is cool to see that the Capital Waters model documents are more and more used as a benchmark for balanced investment documents in many venture deals in the Netherlands and beyond. We are aware of our responsibility in that respect, so we have not made any changes […]

Capital Waters launches two Employee Incentive Plans

Startups can generally not afford to pay huge salaries when hiring key people for the company. Instead most startups want to offer a combination of salary and a (small) stake in the company by implementing an employee incentive plan. As we have set out in one of our previous blogs, employee incentive plans can take […]

Capital Waters 2020 Convertible is online

Given the uncertainty Covid-19 imposes on our daily lives, access to funding for startups and scaleups is likely to be even more challenging than it already is in less eventful times and accordingly being able to limit the time and costs spent on transaction is accordingly more important than ever. In our desire to support […]

Capital Waters – Time for a Change

When we launched Capital Waters five years ago, we did not do anything extraordinary. We published a full set of Dutch law governed early stage transaction documents online. Freely downloadable. We did it because nobody else did it. It turned out to be a big success. Since then, the documents have been used by many […]

Exit clauses

Investors and founders will generally both wish to work towards a successful exit of the company they co-own. Especially if the company achieves a nice exponential growth curve and consequently lucrative exit opportunities arise, interests will usually be aligned. Unfortunately, not every startup shows this much desired growth pattern. Some companies go bankrupt and some […]

Founder vesting arrangements

Vesting of shares is a popular concept with emerging companies. When instigated by an investor, the main goal is to ensure that founders (or managers) are incentivized to remain with the company for a certain amount of time. When agreed between founders it is a way to conditionally slice the pie, meaning that shares in […]

How to value your startup in 38 easy steps

Startup valuation: why bother? Why would you want to know your valuation? So you know how many shares you have to give away when raising money with an investor. Assume you want to raise 400,000. Assume the valuation of your startup is 1,361,772. Then you have to give away 400,000 / 1,361,772 = 29.4% of your shares to the investor. You can […]

Capital Waters convertible loan agreement version 2.1 is online

Version 2.1 of the Capital Waters convertible loan agreement is now online. No material changes have been made (so this version does not deserve to be called version 3 just yet). We mainly made some textual improvements and a few minor tweaks. We changed the definition of Valuation Cap to Conversion Cap in order to […]

How to treat your employees to a part of the pie – ESOPs explained

An Employee participation plan (“ESOP”) is an interesting instrument for entrepreneurs who wish to incentivize and reward their employees (or other contributing parties, but for the context of this blog we will focus on employees; “Participants”). The ESOP will give the Participants a chance to share in the profits in the event that the company […]

The ‘Dead Leaver’ – Personal Matters in Business

Good/bad leaver provisions are commonplace in shareholders’ agreements. They are often the topic of much discussion between the parties. The part on execution and performance of the provision is sometimes somewhat overlooked. In this blogpost I will focus on the leaver in case of death. I will start off by giving a short overview of […]