Learn how to navigate the legal jargon of a shareholders’ agreement in 10 minutes with Ferish Patel, partner-in-charge at the Singapore office of international law firm Cooley, as he runs through the key terms that startup founders should look out for and how to leverage market standards to your advantage.

Timecodes:

00:05 – What is a shareholders’ agreement?
00:53 – Shareholder’s agreements in the fundraising process
02:02 – Never negotiate solo
03:03 – Buffer for more time
03:49 – Get experienced counsel
04:52 – Key terms vs. standard terms
06:15 – Leverage market precedence

Experience the full workshop here.

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Transcript:

What is a shareholders’ agreement:

So shareholders’ agreement, simply put, it’s a fancy way of saying it’s a contract, right?

It’s all the rights and obligations among the company and all of its shareholders, which is another way of saying all of the owners of the business. You know, oftentimes the way to analogize this for better or for worse is that the purchase of shares when an investor is coming in, you know, through what is usually a subscription agreement or a purchase agreement, right?

Kind of different names for the same thing is the way to think about that is that’s the wedding, the shareholder’s agreement is your marriage. And it is life in perpetuity because corporations are perpetual existence entities.

And this is the embodiment, if you will, of all the principles and rights and obligations of your relationship with the owners of the company and the shareholders.