[{"data":1,"prerenderedAt":450},["ShallowReactive",2],{"static-navbar-menu-en":3,"static-footer-menu-en":181,"static-meta-menu-en":196,"wp:team:exists:slug:EN:ilse":210,"team-insights-ilse-en":329},[4,10,25,80,134,162,168],{"id":5,"name":6,"path":7,"level2Items":8,"level3Items":9},751,"Home","/en/",[],[],{"id":11,"name":12,"path":13,"level2Items":14,"level3Items":24},759,"About","/en/about/",[15],{"id":16,"title":17,"path":18,"level3Items":19},7591,"","/",[20],{"id":21,"type":22,"content":23},75911,"text","INC. is a law firm for entrepreneurs who want to make an impact and push boundaries.",[],{"id":26,"name":27,"path":28,"level2Items":29,"level3Items":79},838,"Services","/en/services/",[30,55],{"id":31,"title":32,"path":28,"level3Items":33},8381,"Corporate Services",[34,39,43,47,51],{"id":35,"type":36,"title":37,"path":38},838111,"page","Starting a business","/en/services/starting-a-business/",{"id":40,"type":36,"title":41,"path":42},838112,"Funding, financing & investment","/en/services/funding-financing-investment/",{"id":44,"type":36,"title":45,"path":46},838113,"Business restructuring","/en/services/business-restructuring/",{"id":48,"type":36,"title":49,"path":50},838114,"Exits, sale, mergers & acquisitions","/en/services/exits-sale-mergers-acquisitions/",{"id":52,"type":36,"title":53,"path":54},838115,"Commercial Contracts","/en/services/commercial-contracts/",{"id":56,"title":57,"path":28,"level3Items":58},8382,"IP Services",[59,63,67,71,75],{"id":60,"type":36,"title":61,"path":62},838211,"Registration, protection & licenses","/en/services/ip-protection-strategy-inc/",{"id":64,"type":36,"title":65,"path":66},838212,"From concept to asset","/en/services/from-concept-to-asset/",{"id":68,"type":36,"title":69,"path":70},838213,"Technology contracts & transactions","/en/services/technology-contracts-transactions/",{"id":72,"type":36,"title":73,"path":74},838214,"Development partnerships","/en/services/development-partnerships/",{"id":76,"type":36,"title":77,"path":78},838215,"Media & advertising","/en/services/media-advertising/",[],{"id":81,"name":82,"path":83,"level2Items":84,"level3Items":133},758,"Team","/en/team/",[85,92,101,109,117,125],{"id":86,"title":87,"path":83,"level3Items":88},7581,"INC. TEAM",[89],{"id":90,"type":22,"content":91},75811,"Our team of dedicated and specialized attorneys provides strategic advice and effective solutions. We leverage corporate advice, commercial contracts, and intellectual property to support the sustainable growth of our clients.",{"id":93,"title":94,"path":95,"level3Items":96},7582,"Paul","/en/team/paul/",[97],{"id":98,"type":99,"src":100,"alt":17},75821,"image","/assets/wp-images/2026/03/paul-team-menu.webp",{"id":102,"title":103,"path":104,"level3Items":105},7583,"Martina","/en/team/martina/",[106],{"id":107,"type":99,"src":108,"alt":17},75831,"/assets/wp-images/2026/03/martina-team-menu.webp",{"id":110,"title":111,"path":112,"level3Items":113},7584,"Marit","/en/team/marit/",[114],{"id":115,"type":99,"src":116,"alt":17},75841,"/assets/wp-images/2026/03/marit-team-menu.webp",{"id":118,"title":119,"path":120,"level3Items":121},7585,"Nadine","/en/team/nadine/",[122],{"id":123,"type":99,"src":124,"alt":17},75851,"/assets/wp-images/2026/03/Menu-foto-Nadine.webp",{"id":126,"title":127,"path":128,"level3Items":129},7586,"Ilse","/en/team/ilse/",[130],{"id":131,"type":99,"src":132,"alt":17},75861,"/assets/wp-images/2026/03/ilse-teampage.webp",[],{"id":135,"name":136,"path":137,"level2Items":138,"level3Items":161},839,"Careers","/en/open-application/",[139,146,154],{"id":140,"title":141,"path":137,"level3Items":142},8391,"Open application",[143],{"id":144,"type":22,"content":145},83911,"Do you have between four and eight years of experience at a reputable law firm and are you ready to take on more responsibility?",{"id":147,"title":148,"path":149,"level3Items":150},8392,"Attorney at law - commercial litigation","/en/open-application/commercial-litigation-attorney/",[151],{"id":152,"type":22,"content":153},83921,"You have between four and eight years of experience at a reputable law firm and are ready to take on more responsibility.",{"id":155,"title":156,"path":157,"level3Items":158},8393,"Attorney at law - corporate law","/en/open-application/corporate-law-attorney/",[159],{"id":160,"type":22,"content":145},83931,[],{"id":163,"name":164,"path":165,"level2Items":166,"level3Items":167},757,"Insights","/en/insights/",[],[],{"id":169,"name":170,"path":171,"level2Items":172,"level3Items":180},840,"Contact","/en/utrecht/",[173],{"id":174,"title":175,"path":171,"level3Items":176},8401,"Utrecht",[177],{"id":178,"type":179},84011,"contactInfo",[],[182,184,186,188,190,192,194],{"id":183,"name":6,"path":7},877,{"id":185,"name":12,"path":13},878,{"id":187,"name":27,"path":28},879,{"id":189,"name":82,"path":83},880,{"id":191,"name":136,"path":137},881,{"id":193,"name":164,"path":165},882,{"id":195,"name":170,"path":171},883,[197,202,206],{"id":198,"name":199,"path":200,"target":201},935,"Terms and Conditions","https://www.thisisinc.com/en/terms-and-conditions/",null,{"id":203,"name":204,"path":205,"target":201},933,"Privacy statement","https://www.thisisinc.com/en/privacy-statement/",{"id":207,"name":208,"path":209,"target":201},934,"Office Complaints Procedure","https://www.thisisinc.com/en/office-complaints-procedure/",{"id":211,"title":212,"uri":213,"slug":214,"date":215,"modified":216,"status":217,"language":218,"translations":221,"seo":228,"teamFields":231,"rowCollection":306,"acf":307},"cG9zdDoxMTQ0","Ilse Berends","https://www.thisisinc.com/en/team/ilse/","ilse","2026-03-17T11:33:39","2026-03-27T10:04:48","publish",{"code":219,"slug":220},"EN","en",[222],{"id":223,"uri":224,"language":225},"cG9zdDoxMTI5","https://www.thisisinc.com/team/ilse/",{"code":226,"slug":227},"NL","nl",{"title":229,"metaDesc":230,"opengraphTitle":229,"opengraphDescription":230},"Ilse Berends | attorney at INC.","Ilse Berends is a corporate law and M&A attorney. She advises on transactions (Venture and M&A) and with strategic partnerships that matter most.",{"foto":232,"functie":234,"rows":235},{"node":233},{"sourceUrl":132,"altText":17},"attorney",[236,241,253,263,267,274],{"__typename":237,"quote":238,"source":239,"anchor":201,"htmlClass":201},"RowCollectionRowsRowQuoteLayout","\u003Cp>MAKE IT SIMPLE. MAKE IT HAPPEN.\u003C/p>\n",{"fullName":212,"function":240},"attorney at law",{"__typename":242,"title":201,"content":243,"imagePosition":244,"fullHeight":245,"backgroundColor":246,"labels":201,"anchor":201,"htmlClass":201,"call2ActionsData":247},"RowCollectionRowsRowTextLayout","\u003Cdiv>Ilse Berends works at INC. as a corporate law specialist, focusing on M&A and venture capital. After seven years at Van Benthem & Keulen — one of the leading law firms in the Netherlands — she joined INC., a firm that aligns with her ambitions and with the entrepreneurs she aims to help grow.\u003C/div>\n","left",true,"black",[248],{"label":249,"type":250,"url":17,"pageLink":201,"target":251,"email":252,"file":17,"anchorId":201},"Get in touch","email","_self","berends@thisisinc.com",{"__typename":254,"anchor":201,"htmlClass":201,"backgroundColor":255,"imageGroup":256},"RowCollectionRowsRowImageLayout","white",{"image":257,"imageMobile":260},{"node":258},{"sourceUrl":259,"altText":17},"/assets/wp-images/2026/03/INC.-_-2026-website-2-scaled.jpg",{"node":261},{"sourceUrl":262,"altText":17},"/assets/wp-images/2026/03/INC.-_-2026-61-scaled.jpg",{"__typename":242,"title":201,"content":264,"imagePosition":265,"fullHeight":266,"backgroundColor":246,"labels":201,"anchor":201,"htmlClass":201,"call2ActionsData":201},"\u003Cp>Ilse works closely with founders, investors and entrepreneurs who are on the move. Whether it concerns funding rounds, shareholders’ agreements, acquisitions or exits, she ensures that the legal side of a deal is solid and understandable. No unnecessary complexity, just the depth that is needed. Her approach is direct, accessible and pragmatic: she translates legal complexity into clear choices, thinks along at a strategic level and makes sure her advice is immediately applicable in practice.\u003C/p>\n\u003Cdiv>\n\u003Cp>What drives her? The energy of working with entrepreneurs at crucial moments – whether it’s a first investment round, a strategic acquisition or an exit after years of building. Ilse understands what is at stake and what it takes to achieve the right outcome.\u003C/p>\n","right",false,{"__typename":268,"title":201,"content":269,"anchor":201,"htmlClass":201,"backgroundColor":246,"afbeeldingVerbergenOpMobile":266,"imageGroup":270,"call2ActionsData":201},"RowCollectionRowsRowTextImageLayout","\u003Cp>\u003Ca href=\"mailto:berends@thisisinc.com\">Get in Touch↗\u003C/a>\u003Cbr />\n\u003Ca href=\"mailto:berends@thisisinc.com\">berends@thisisinc.com\u003C/a>\u003Cbr />\n\u003Ca href=\"tel:+31857444788\">085 7444 788\u003C/a>\u003Cbr />\n\u003Ca href=\"https://www.linkedin.com/in/ilseberends/\">LinkedIn↗\u003C/a>\u003C/p>\n",{"imagePosition":244,"image":271},{"node":272},{"sourceUrl":273,"altText":17},"/assets/wp-images/2026/03/ilse-contact.jpg",{"__typename":275,"title":201,"teamSelection":276,"call2ActionsData":201,"anchor":201,"htmlClass":201},"RowCollectionRowsRowTeamLayout",{"nodes":277},[278,288,297],{"id":279,"title":280,"uri":281,"slug":282,"teamFields":283},"cG9zdDo3Nzk=","Paul Passenier","https://www.thisisinc.com/en/team/paul/","paul",{"foto":284,"functie":287},{"node":285},{"sourceUrl":286,"altText":17},"/assets/wp-images/2025/11/paul-team.webp","attorney at law | partner",{"id":289,"title":290,"uri":291,"slug":292,"teamFields":293},"cG9zdDo3NzY=","Nadine van Herwaarden","https://www.thisisinc.com/en/team/nadine/","nadine",{"foto":294,"functie":240},{"node":295},{"sourceUrl":296,"altText":17},"/assets/wp-images/2026/03/Nadine-teampage.webp",{"id":298,"title":299,"uri":300,"slug":301,"teamFields":302},"cG9zdDo3Nzg=","Martina van Eldik","https://www.thisisinc.com/en/team/martina/","martina",{"foto":303,"functie":287},{"node":304},{"sourceUrl":305,"altText":17},"/assets/wp-images/2025/11/martina-team.webp",{"rows":235},{"rowCollection":308},{"rows":309},[310,313,316,320,323,326],{"__typename":237,"rowQuote":311},{"quote":238,"source":239,"settings":312},{"anchor":201,"htmlClass":201},{"__typename":242,"rowText":314},{"title":201,"content":243,"imagePosition":244,"fullHeight":245,"labels":201,"callToActions":247,"backgroundColor":246,"settings":315},{"anchor":201,"htmlClass":201},{"__typename":254,"rowImage":317},{"title":-1,"imageGroup":318,"backgroundColor":255,"settings":319},{"image":258,"imageMobile":261},{"anchor":201,"htmlClass":201},{"__typename":242,"rowText":321},{"title":201,"content":264,"imagePosition":265,"fullHeight":266,"labels":201,"callToActions":201,"backgroundColor":246,"settings":322},{"anchor":201,"htmlClass":201},{"__typename":268,"rowTextImage":324},{"title":201,"content":269,"imageGroup":270,"mobileHideImage":266,"callToActions":201,"backgroundColor":246,"settings":325},{"anchor":201,"htmlClass":201},{"__typename":275,"rowTeam":327},{"title":201,"teamSelection":276,"callToActions":201,"settings":328},{"anchor":201,"htmlClass":201},[330,355,376,394,413,432],{"id":331,"title":332,"uri":333,"slug":334,"date":335,"modified":336,"status":217,"language":337,"translations":338,"insightFields":343,"insightCategories":345},"cG9zdDoxMDY2","SAFE: A Simple Tool for Early-Stage Startup Funding","https://www.thisisinc.com/en/insights/safe-for-early-stage-startup-financing/","safe-for-early-stage-startup-financing","2026-01-13T10:18:07","2026-01-13T10:25:09",{"code":219,"slug":220},[339],{"id":340,"uri":341,"language":342},"cG9zdDo1NjA=","https://www.thisisinc.com/insights/safe-voor-vroege-investeringen-in-startups/",{"code":226,"slug":227},{"title":201,"content":344,"auteurCopy":201},"\u003Cp>SAFE: A Fast Track for Early-Stage Startup Investments? Where the Convertible Loan Agreement (CLA) has long been familiar, the SAFE is rapidly gaining ground. This article explains everything you need to know about SAFEs.\u003C/p>\n\u003Cp>For innovative startups, early-stage funding is critical to develop their product. Investments are needed at a time when revenue is typically non-existent (pre-revenue). Traditional bank loans are not an option at this stage. While the Convertible Loan Agreement (CLA) has been widely used in the Netherlands, the SAFE (Simple Agreement for Future Equity) is quickly becoming a popular alternative.\u003C/p>\n\u003Cp>Selling shares early is often undesirable for both founders and investors. For founders, valuations immediately after incorporation are too low, causing excessive dilution. For investors, the risk-reward ratio is skewed, or a reliable valuation simply cannot be established. CLAs have therefore been a common solution. The SAFE offers another option: a streamlined (simple) agreement for future equity.\u003C/p>\n\u003Ch3>Priced Round versus Convertible Round\u003C/h3>\n\u003Cblockquote>\n\u003Cp>\u003Cem>Priced round\u003C/em>\u003C/p>\n\u003Cp>\u003Cem>When startups raise capital by issuing shares at a fixed price per share, the company is valued and the round is considered a “priced round.” Founders know exactly how many shares they will issue and how much dilution they will face. Investors know their precise ownership stake. Shares carry voting rights, and under the shareholders’ agreement, investors typically receive information rights and sometimes veto rights. Most Series A and later rounds are priced rounds.\u003C/em>\u003C/p>\n\u003Cp>\u003Cem>Convertible round (unpriced round)\u003C/em>\u003C/p>\n\u003Cp>\u003Cem>In the early stages (pre-seed, seed, late seed), rounds are often “unpriced.” These rounds use instruments that convert into equity later, once a valuation is negotiated or set by new investors. At this stage, startups are usually focused on product development and finding product-market fit, with little or no revenue. Valuation is difficult. SAFEs and CLAs are therefore common tools for raising capital.\u003C/em>\u003C/p>\n\u003C/blockquote>\n\u003Cp> \u003C/p>\n\u003Cp>A CLA is a loan that accrues interest and may convert into shares later, typically at the next priced round, based on the loan amount plus accrued interest. Conversion may be optional for the investor. A SAFE is simpler: it is an agreement where the investor prepays for future shares, converting at the next priced equity round. Unlike a CLA, a SAFE is not a loan—there is no repayment obligation and no interest. SAFEs usually include a \u003Cem>valuation cap\u003C/em> and/or \u003Cem>discount rate\u003C/em> to reward early risk-taking. More on that below.\u003C/p>\n\u003Cp>Both SAFEs and CLAs are designed to structure investments quickly and defer valuation until the next equity financing. SAFEs require less documentation than a share issuance and no notary involvement. Templates are widely available, reducing costs. However, as always, the \u003Cem>devil is in the details\u003C/em>. Post-money SAFEs can lead to significant dilution for founders if not carefully managed. Some investors prefer priced rounds because valuation is a core part of their decision-making. Not all investors will accept SAFEs, which can complicate fundraising.\u003C/p>\n\u003Ch3>In this Article you will learn:\u003C/h3>\n\u003Cul>\n\u003Cli>What a SAFE is and how it works\u003C/li>\n\u003Cli>Key legal and tax considerations under Dutch law\u003C/li>\n\u003Cli>Strategic advantages for startups and investors\u003C/li>\n\u003Cli>Essential clauses to include\u003C/li>\n\u003Cli>How to choose the right instrument for your round\u003C/li>\n\u003C/ul>\n\u003Ch3>01      What is a SAFE?\u003C/h3>\n\u003Cp>Developed by Y Combinator in the U.S. as a simpler alternative to convertible notes, the SAFE became a standard for early-stage funding. The concept: the investor prepays for future shares, converting at the next equity financing (priced round). Unlike many CLAs, SAFEs typically have no maturity date, no interest, and no repayment obligation. They often include a valuation cap and/or discount rate, giving the investor a better price per share than new investors in the priced round.\u003C/p>\n\u003Cp>SAFEs work for Dutch B.V.s and N.V.s because they convert into shares. Foundations, associations, and cooperatives cannot use SAFEs. U.S. templates need adjustments for Dutch corporate law, particularly around shareholder resolutions and pre-emptive rights.\u003C/p>\n\u003Cp>Who uses SAFEs? Seed-stage startups often raise SAFE funding from angel investors, early-stage VC funds, accelerators, and friends & family. Family offices and other investors are increasingly familiar with SAFEs. International investors also favor SAFEs because they are widely recognized and easy to implement across jurisdictions.\u003C/p>\n\u003Ch3>02      SAFE Classification: Debt or Equity?\u003C/h3>\n\u003Cp>In the U.S., SAFEs are treated as irrevocable capital contributions, not loans, and taxed under capital gains rules. In the Netherlands, classification is less clear. With no repayment obligation and no interest, SAFEs resemble equity. However, if the SAFE includes a contractual right to repayment (e.g., upon dissolution), it may be treated as debt. Each case requires careful analysis.\u003C/p>\n\u003Ch3>03      Essential SAFE terms\u003C/h3>\n\u003Cp>\u003Cem>Trigger events\u003C/em>\u003Cem>: \u003C/em>In a SAFE, it is absolutely critical to define clearly when conversion into shares will occur. Typically, conversion happens at the next equity financing or “Qualified Financing.” Equity Financing is often described as “the next issuance of new shares,” meaning that every share issuance could, in theory, trigger conversion. However, not all SAFEs work this way. Some agreements specify that only share issuances above a certain minimum investment amount qualify as an Equity Financing and therefore trigger conversion. This is why it is essential to agree upfront on what constitutes an Equity Financing or Qualified Financing and under which circumstances the SAFE will convert.\u003C/p>\n\u003Cp>Most SAFEs also include provisions for \u003Cstrong>Liquidity Events\u003C/strong> and \u003Cstrong>Dissolution Events\u003C/strong>. A Liquidity Event can include a sale of shares by the founders, a change of control (for example, following such a share sale or a merger), an IPO, or even the sale of all or substantially all of the startup’s assets. A Dissolution Event refers to winding up or termination of the business. In these scenarios, the SAFE investor must be compensated—either through repayment or by issuing shares.\u003C/p>\n\u003Cp>Cash compensation is often calculated based on what the investor would have received if the SAFE had converted immediately before the Liquidity Event. In some cases, a fixed cash payout is agreed upon, commonly 1x or 2x the SAFE amount. The Y Combinator model goes further by attaching a liquidation preference to the SAFE, functioning as a standard non-participating liquidation preference on preferred shares. This means that, at least according to the contract, the SAFE investor ranks ahead of certain other creditors in the payout waterfall.\u003C/p>\n\u003Cp>\u003Cem>Conversion of SAFE shares\u003C/em>\u003Cem>: \u003C/em>A SAFE agreement typically specifies, often in the definitions section, the type of shares into which the SAFE will convert during a priced round. In most cases, these are “preferred shares,” meaning the most senior class of shares issued to investors in that priced equity financing. Templates can be adapted to reflect different structures. For example, if investors are expected to convert into certificates via a STAK (Dutch trust office foundation, \u003Cem>stichting\u003C/em>) or into cooperative membership interests in a cooperative association (\u003Cem>coöperatie\u003C/em>), the SAFE agreement is the right place to capture those details explicitly. Without any alternative arrangement, conversion will default to preferred shares.\u003C/p>\n\u003Cp>\u003Cem>Valuation Caps\u003C/em>\u003Cem>: \u003C/em>A SAFE includes a formula that determines, at the time of the equity financing, how many preferred shares the investor will receive upon conversion. The starting point for this calculation is the price per share paid by new investors in that priced round. From there, the SAFE may apply a discount to that price per share, giving the SAFE investor a more favorable entry point.\u003C/p>\n\u003Cp>In addition to discounts, SAFEs often feature a \u003Cstrong>valuation cap\u003C/strong>: a maximum company valuation for conversion purposes. If the startup’s valuation in the equity financing exceeds the agreed valuation cap, the lower capped valuation is used to calculate the conversion price per share instead of the actual higher valuation. This mechanism ensures that early investors are rewarded for taking on greater risk by securing a better price per share than later investors.\u003C/p>\n\u003Cp>It is absolutely essential to be clear on whether the SAFE uses a \u003Cstrong>pre-money valuation cap\u003C/strong> or a \u003Cstrong>post-money valuation cap\u003C/strong>, as the difference significantly impacts dilution. The following examples illustrate this distinction:\u003C/p>\n\u003Cblockquote>\n\u003Cp>\u003Cem>Pre-money SAFE\u003C/em>\u003C/p>\n\u003Cp>\u003Cem>An investor contributes €500,000 under a SAFE with a \u003Cstrong>pre-money valuation cap\u003C/strong> of €2,500,000. At the time of the equity financing, the startup has 120,000 shares outstanding on a fully diluted basis. The conversion price per share is calculated as follows: Price per share = €2,500,000 divided by 120,000 shares = €20.83.\u003C/em>\u003C/p>\n\u003Cp>\u003Cem>The investor’s €500,000 investment divided by €20.83 results in \u003Cstrong>24,000 shares\u003C/strong>, giving the investor \u003Cstrong>16.67% ownership\u003C/strong> after conversion.\u003C/em>\u003C/p>\n\u003Cp>\u003Cem>Post-money SAFE\u003C/em>\u003C/p>\n\u003Cp>\u003Cem>An investor contributes €500,000 under a SAFE with a \u003Cstrong>post-money valuation cap\u003C/strong> of €2,500,000. In this case, the investor’s ownership percentage is calculated by dividing the investment amount by the post-money valuation cap: €500,000 divided by €2,500,000 = 0.2 or 20%.\u003C/em>\u003C/p>\n\u003Cp>\u003Cem>This means the investor is entitled to \u003Cstrong>20% of the company after conversion\u003C/strong>. Assuming the company had 120,000 shares outstanding before conversion, the investor would receive \u003Cstrong>30,000 new shares\u003C/strong>, resulting in a total of 150,000 shares post-financing (30,000 ÷ 150,000 = 20%).\u003C/em>\u003C/p>\n\u003C/blockquote>\n\u003Cp>In most templates, a post-money valuation cap represents the ceiling or maximum valuation including all SAFE investments. A pre-money valuation cap, on the other hand, applies before the company receives any SAFE (or other convertible) investments. These two concepts are closely related but refer to different points in time.\u003C/p>\n\u003Cp>Put simply: \u003Cem>Pre-money cap = Post-money cap minus SAFE amounts.\u003C/em>\u003C/p>\n\u003Cp>This distinction matters because stacking multiple SAFEs can unintentionally lead to significant dilution for founders. Every additional SAFE effectively reduces the pre-money cap, meaning that dilution from subsequent SAFEs falls entirely on the founders. Careful modeling of the cap table is essential to avoid surprises.\u003C/p>\n\u003Cp>\u003Cem>Discount:\u003C/em>\u003Cem> \u003C/em>The discount in a SAFE gives investors a reduced price per share compared to new investors in the priced round or equity financing. It is an alternative method for calculating the number of shares issued upon conversion when no valuation cap is agreed or when the priced round valuation is lower than the agreed cap. If both a discount and a valuation cap apply, the investor typically receives the more favorable outcome of the two conversion formulas.\u003C/p>\n\u003Cp>\u003Cem>Most Favored Nation:\u003C/em>\u003Cem> \u003C/em> Some investors request an MFN clause to ensure they automatically receive an upgrade if later SAFEs are issued on better terms. For example, if subsequent investors negotiate a lower valuation cap or a higher discount, the original investor’s SAFE terms are adjusted accordingly. Once the SAFE converts into shares, the MFN clause no longer applies.\u003C/p>\n\u003Cp>\u003Cem>Pro rata rights:\u003C/em>\u003Cem> \u003C/em>Under Dutch law and most articles of association, shareholders generally have pre-emptive rights on new share issuances, allowing them to purchase a pro rata portion of new shares to avoid dilution—provided they are willing to invest additional capital (“pay or dilute”). A SAFE investor is not yet a shareholder but often wants the right to participate in future rounds, such as the equity financing, to maintain ownership percentage.\u003C/p>\n\u003Cp>For this reason, SAFE agreements frequently include pro rata rights—typically documented in a \u003Cstrong>side letter\u003C/strong> rather than the main agreement. This side letter is signed simultaneously with the SAFE and cross-referenced to it. Its purpose is to guarantee the investor the opportunity to maintain their stake in the company during future capital raises, provided they actively participate in those rounds.\u003C/p>\n\u003Ch3>04       Strategic advantages\u003C/h3>\n\u003Cp>\u003Cem>Solving the valuation challenge in early stages:\u003C/em>\u003Cem> \u003C/em>Valuing young companies is inherently difficult. Traditional methods such as EBITDA multiples or discounted cash flow analyses fail to capture growth potential. A SAFE allows valuation to be deferred until the startup has built a financial track record and a more predictable growth trajectory—aligning valuation with that of future investors during an equity financing round.\u003C/p>\n\u003Cp>\u003Cem>Accelerated fundraising process:\u003C/em>\u003Cem> \u003C/em>Another major advantage of SAFEs is speed. SAFEs can significantly shorten the fundraising timeline. Numerous templates are available, and notarial involvement is avoided because shares do not need to be issued immediately. Negotiations over shareholders’ agreements are postponed, reducing legal complexity and making the instrument attractive. Templates are widely accessible and require only minor adjustments for Dutch law, even in an international context—making SAFEs appealing to foreign investors as well.\u003C/p>\n\u003Ch3>05       Challenges\u003C/h3>\n\u003Cp>\u003Cem>Not all investors accept SAFEs\u003C/em>: Some investors are unwilling to postpone valuation. Conversely, those same investors may also be less inclined to invest in the seed stage, which requires a higher risk tolerance.\u003C/p>\n\u003Cp>\u003Cem>Dilution risk\u003C/em>: Founders must maintain an accurate and up-to-date cap table to avoid unpleasant surprises when converting post-money capped SAFEs. Mismanagement here can lead to significant unintended dilution.\u003C/p>\n\u003Cp>\u003Cem>Legal requirements:\u003C/em> Under Dutch corporate law, SAFEs qualify as “rights to future share issuance.” This requires a shareholder resolution and may trigger pre-emptive rights unless these are excluded. Proper documentation of the shareholder resolution (and sometimes supervisory board approval) is legally necessary.\u003C/p>\n\u003Cp>\u003Cem>Template pitfalls:\u003C/em> Online templates often come with additional side letters that favor investor interests. This is particularly true for provisions on reserved matters, warranties, and covenants. Such clauses can severely restrict operational flexibility by requiring investor approval for even routine decisions. For startups, maintaining fast governance and avoiding blocking rights by minority investors is critical—ensure approval processes remain light and efficient. Both founders and investors should be aware of these pitfalls.\u003C/p>\n\u003Ch2>Specialized fundraising support\u003C/h2>\n\u003Cp>Navigating fundraising requires strategic legal advice tailored to your industry, business model, and stakeholders.\u003C/p>\n\u003Cp>INC.’s specialized team provides comprehensive support to founders and investors throughout the entire financing process—from designing pitch decks and modeling cap tables to initial negotiations, documentation, conversion, and beyond.\u003C/p>\n\u003Cp>Get in touch with INC. to discuss your specific case and let INC. contribute to your success.\u003C/p>\n",{"nodes":346},[347,351],{"id":348,"name":349,"slug":350},"dGVybTo3NQ==","Funding, Financing & Investment","funding-financing-investment",{"id":352,"name":353,"slug":354},"dGVybTo3Mw==","Starting a Business","starting-a-business",{"id":356,"title":357,"uri":358,"slug":359,"date":360,"modified":361,"status":217,"language":362,"translations":363,"insightFields":368,"insightCategories":370},"cG9zdDoxMDY5","Share Purchase Agreement: a practical guide","https://www.thisisinc.com/en/insights/share-purchase-agreement-a-practical-guide/","share-purchase-agreement-a-practical-guide","2025-11-26T11:06:20","2026-01-13T11:09:57",{"code":219,"slug":220},[364],{"id":365,"uri":366,"language":367},"cG9zdDo1Njc=","https://www.thisisinc.com/insights/share-purchase-agreement/",{"code":226,"slug":227},{"title":201,"content":369,"auteurCopy":201},"\u003Cp>When selling shares in companies, the Share Purchase Agreement (SPA) plays a crucial role. This comprehensive contract governs all aspects of the transfer of shares between seller and buyer, from the purchase price and payment terms to warranties and indemnities. Whether it concerns a full acquisition, a majority stake, or a minority interest, a carefully drafted SPA protects the interests of both parties. It ensures a structured transaction and reduces the risk of unpleasant surprises afterwards. Drafting an SPA requires legal expertise, as the document contains complex provisions regarding value, purchase price calculation, due diligence, closing conditions, warranties, and post-closing obligations, all of which are decisive for the success of the transaction.\u003C/p>\n\u003Cp>The SPA is the final stage of several phases of negotiations, beginning with exploratory talks, a deal outline recorded in a (often non-binding) letter of intent, and usually follows an extensive due diligence investigation. The SPA allocates certain risks between seller and buyer, so both parties know exactly where they stand at the actual transfer of shares in the target company.\u003C/p>\n\u003Cp>In this article, we set out the key points of the SPA and briefly discuss the due diligence investigation. After reading this article, you will understand purchase price mechanisms, the system of warranties and indemnities, and the important obligations of investigation and disclosure relevant to the SPA. Finally, other important provisions are briefly discussed.\u003C/p>\n\u003Ch2>Purchase price mechanism: locked box or closing accounts\u003C/h2>\n\u003Cp>In the transfer of a business, it is common to work with an effective date, for example, 1 January, on which the economic transfer takes place, while the legal transfer is completed later. Delivery thus occurs retroactively. This construction raises the question of how to deal with events occurring between the effective date and the actual delivery date. Since the target company remains operational during the transfer, its value may fluctuate. In addition to the question of the sale price, the mechanisms for determining the final purchase price are crucial. There are two main methods: the locked box mechanism and the closing accounts mechanism. The key difference is whether the purchase price is determined before the transfer (locked box) or can be adjusted afterwards based on the financial figures at the date of transfer (closing accounts).\u003C/p>\n\u003Cp>With a locked box, parties agree on an effective date prior to the actual delivery date of the shares, often the end of the previous quarter or financial year. The financial position of the company on that effective date is recorded, for example, the equity according to the balance sheet as of 31 December 2024. From the effective date, buyer and seller consider the target company as economically transferred to the buyer: all results (profit or loss) from that moment are for the buyer, even though the legal transfer takes place later. The purchase price is determined based on that historical balance sheet and is fixed on the delivery date. No recalculation takes place afterwards. This provides the seller with a high degree of price certainty. The seller knows exactly what amount will be received upon transfer. For the buyer, it means benefiting economically from the effective date: if the target company makes a profit in the interim, that profit accrues to the buyer without additional payment (unless an interest compensation is agreed, see below).\u003C/p>\n\u003Cp>Because there is a period between the effective date and the delivery date, the buyer will want to make arrangements to prevent value from ‘leaking’ from the target company during that period. Without such arrangements, the seller could benefit by, for example, paying out extra dividends. These arrangements are included in a leakage provision, which means the seller guarantees that no unauthorized withdrawals or distributions have been made to themselves or affiliated parties after the effective date. Exceptions are usually included, such as payment of normal salary or current management fees. If it turns out that the seller has withdrawn money in violation of the Leakage provision, the seller must repay this to the buyer (usually deducted euro-for-euro from the purchase price).\u003C/p>\n\u003Cp>Because the final payment of the purchase price under the locked box mechanism often takes place months after the effective date, while the financial result from the effective date accrues to the buyer, an interest compensation is sometimes agreed. Usually, the seller receives interest on the purchase price from the effective date to the delivery date. This compensates for the fact that the buyer is already the economic owner during that period (in retrospect) and any profits benefit the buyer, while the seller has kept the company running until the delivery date.\u003C/p>\n\u003Cp>The closing accounts mechanism takes the opposite approach. Here, the delivery date is also the economic transfer date. There is no interim period in which the buyer bears risk while the seller is still the owner: the seller bears all risks until the actual transfer. On the delivery date, the buyer pays a provisional purchase price, usually based on estimates or a provisional balance sheet as of that day. Afterwards, a final balance sheet is drawn up as of the delivery date (the closing accounts). This may take several weeks. Based on these final figures, the definitive purchase price is determined. If this differs from the provisional price, a settlement follows: if the target company has less cash or more debt than expected, the buyer receives money back. If the target company has more liquid assets or higher working capital, the seller receives an additional payment. In effect, the final value of the target company is settled on the delivery date once all facts are known.\u003C/p>\n\u003Cp>Under closing accounts, the period until the delivery date is less sensitive, as all profits and losses until transfer are for the seller. The seller remains fully responsible for financial developments until the day of delivery. For example, if the seller pays themselves a bonus just before closing, this reduces the cash in the company and thus the final price – they ultimately pay that bonus themselves. A Leakage provision is therefore usually unnecessary with closing accounts, as the mechanism automatically corrects withdrawals in the final settlement (although the buyer will guard against extreme behaviour).\u003C/p>\n\u003Cp>In practice, closing accounts are mainly used when the financial position can fluctuate significantly in the short term. If the target company is highly seasonal or undergoing a special transaction, closing accounts may be fairer. Also, in acquisitions of parts of larger companies (carve-outs), where a clear separate balance sheet must be drawn up, closing accounts are common. Some (international) buyers prefer closing accounts in other cases as well, as they do not want to bear (liability) risk for events that occurred before they were owners. But if it is a stable company with reliable figures, the Dutch market often prefers locked box.\u003C/p>\n\u003Ch2>Warranties and indemnities: risk allocation & duties of purchaser and seller\u003C/h2>\n\u003Cp>In addition to the price, the SPA mainly regulates who bears which risks after the target company has been transferred. The instruments for this are warranties (\u003Cem>garanties\u003C/em>) and indemnities (\u003Cem>vrijwaringen\u003C/em>) provided by the seller to the buyer. Two important legal obligations also come into play: the seller’s duty of disclosure and the buyer’s duty of investigation. These obligations form the background against which warranties and indemnities are agreed. In this section, we first explain what warranties and indemnities are, and then how the duties of disclosure and investigation work in practice in a SPA.\u003C/p>\n\u003Ch3>\u003Cem>What is the difference between warranties and indemnities?\u003C/em>\u003C/h3>\n\u003Cp>Warranties in an SPA are contractual promises by the seller that certain matters are correct at the time of transfer and that the shares (and the company) have certain characteristics (or do not have them). Examples include statements such as: “The annual accounts give a true and fair view of the size and composition of the target company’s assets as at the end of 2024”, “the target company holds all necessary permits”, “there are no ongoing or threatened legal proceedings”, “all tax returns have been filed on time”. If it later turns out that such a warranty was incorrect, there is a breach. The buyer can hold the seller liable for the damage suffered because the warranty was not correct. Warranties usually cover unknown problems: matters neither party knew about (or only the seller may have known, but did not explicitly disclose). They give the buyer peace of mind that if there is a “skeleton in the closet”, the seller must compensate the resulting damage. In essence, warranties shift risks from buyer to seller.\u003C/p>\n\u003Cp>Indemnities concern specific, known risks. Generally, these are facts or risks revealed during due diligence. Indemnity means the seller promises that if a flagged risk actually materializes, the costs will be borne by the seller. Indemnity is therefore targeted risk coverage. This differs from warranties, where it must first be shown that there is a breach of warranty and that damage has resulted. Indemnities are mainly important to cover deal-breaking risks: the buyer proceeds with the acquisition despite a known problem, because the seller promises to resolve the problem if it goes wrong.\u003C/p>\n\u003Cp>In practice, warranties and indemnities complement each other. It is often agreed that for known issues, only the indemnity applies and no further rights exist – that is, these issues do not count as warranty breaches because they are already known and covered by the indemnity. For all other (hidden) matters, the buyer relies on the warranties.\u003C/p>\n\u003Ch3>\u003Cem>Duty of disclosure and duty of investigation \u003C/em>\u003C/h3>\n\u003Cp>When entering into an agreement, the seller has a duty to provide relevant information, and the buyer has a duty to conduct proper investigation. In principle, the duty of disclosure takes precedence: as seller, you must disclose important matters, especially if the buyer cannot easily find them. The buyer may also rely on the accuracy of the seller’s disclosures. However, the buyer must conduct investigation: if there are clear indications of a problem or risk, the buyer must investigate and ask follow-up questions. Something that is obviously present, but which the buyer failed to investigate, cannot later be claimed as a hidden defect.\u003C/p>\n\u003Cp>The warranties attached as an annex to an SPA are often standardised. The warranties cover corporate law, financial, and commercial matters. They usually also include an information warranty, meaning the seller has shared all essential information. As seller, you should carefully review the warranties and consider whether anything might make a warranty incorrect. If so, this must be disclosed, sometimes in the form of a Disclosure Letter. The Disclosure Letter is an implementation of the seller’s duty of disclosure.\u003C/p>\n\u003Cp>Whether a duty of disclosure existed for the seller depends on the circumstances of the case. The Dutch Supreme Court’s Hoog Catharijne judgment (Hoog Catharijne-arrest) established that the scope of the duty of disclosure may be limited by the fact that the buyer has had experts conduct a due diligence investigation.\u003Ca href=\"#_ftn1\" name=\"_ftnref1\">[1]\u003C/a>\u003C/p>\n\u003Cp>The purchaser’s duty of investigation is reflected in the due diligence investigation. The buyer then has the opportunity to request and examine various documents and ask follow-up questions. The due diligence investigation is discussed further below.\u003C/p>\n\u003Ch2>Due Diligence: the importance of a thorough investigation\u003C/h2>\n\u003Cp>Due diligence literally means ‘appropriate care’. It is a comprehensive investigation by the buyer into all aspects of the target company, including finances, contracts, legal issues, IT, and personnel. The purpose is twofold: (1) the buyer wants to confirm that the target company is truly worth the price and has no hidden defects, and (2) any risks that emerge can be discussed, resolved, or contractually addressed before the acquisition (for example, via an indemnity). Conducting due diligence is also an implementation of the buyer’s duty of investigation.\u003C/p>\n\u003Cp>For a seller, it is important to record which documents have been shared with the buyer, so it can be proven what the buyer knew or could have known. This usually happens automatically when a digital data room is used.\u003C/p>\n\u003Cp>An SPA will state that the buyer has had the opportunity to investigate the target company and has decided to proceed with the purchase of shares based on the results of the investigation.\u003C/p>\n\u003Ch2>Limitations of liability\u003C/h2>\n\u003Cp>A seller will want to limit liability for breach of warranty. Including certain limitations in an SPA is common. The limitations can take various forms. The most common is a maximum amount (cap) for liability. Often, a threshold amount is also included, meaning that if the damage is less than the threshold, the buyer cannot claim under the warranty. This prevents the buyer from making claims for every minor issue. By agreeing on a basket, the buyer can claim for many small damages that together exceed the threshold.\u003C/p>\n\u003Cp>Generally, liability limitations do not apply to indemnities, as these concern a specific risk that buyer and seller have agreed remains fully with the seller (the party giving the indemnity).\u003C/p>\n\u003Ch2>Other provisions in a Share Purchase Agreement\u003C/h2>\n\u003Cp>The above components form the core of the SPA. In addition, other provisions will be included, such as conditions precedent (\u003Cem>opschortende voorwaarden\u003C/em>), delivery provisions, tax clauses, post-closing obligations, non-compete and non-solicitation clauses, and confidentiality clauses. Two of these provisions are explained below.\u003C/p>\n\u003Cp>Post-closing obligations may require the seller to remain employed by the target company for a certain period after the delivery date, often to facilitate a smooth transition. In practice, it is common for an earn-out arrangement to be agreed as part of the purchase price. This incentivises the seller to maintain the target company’s performance. The buyer may also defer payment of part of the purchase price to a later date. Other post-closing obligations are also possible.\u003C/p>\n\u003Cp>Non-compete and non-solicitation clauses are also relatively common to protect the buyer. The buyer wants to prevent the seller from starting a competing business and then persuading all customers and employees of the target company to switch.\u003C/p>\n\u003Ch2>Conclusion\u003C/h2>\n\u003Cp>The SPA can be a complex legal document. For both buyer and seller, it is important to engage a good advisor to conduct negotiations and achieve a favorable deal.\u003C/p>\n\u003Cp>The experienced lawyers at INC. assist both buyers and sellers in acquisition processes. We think strategically, assist in drafting the letter of intent, conduct due diligence investigations, and prepare the SPA and related documents.\u003C/p>\n\u003Cp>Contact INC. to discuss your specific case.\u003C/p>\n\u003Cp>\u003Ca href=\"#_ftnref1\" name=\"_ftn1\">[1]\u003C/a> Hoge Raad 22 december 1995, ECLI:NL:HR:1995:ZC1930 (\u003Cem>Hoog Catharijne\u003C/em>).\u003C/p>\n",{"nodes":371},[372],{"id":373,"name":374,"slug":375},"dGVybTo3OQ==","Sale, Mergers & Acquisitions","sale-mergers-acquisitions",{"id":377,"title":378,"uri":379,"slug":380,"date":381,"modified":382,"status":217,"language":383,"translations":384,"insightFields":389,"insightCategories":391},"cG9zdDo1NzI=","AI, IP & copyright","https://www.thisisinc.com/en/insights/ai-ip-copyright-in-commerciele-contracten/","ai-ip-copyright-in-commerciele-contracten","2025-11-21T15:13:46","2026-01-13T09:03:16",{"code":219,"slug":220},[385],{"id":386,"uri":387,"language":388},"cG9zdDo1MTA=","https://www.thisisinc.com/insights/ai-ip-copyright-in-commerciele-contracten/",{"code":226,"slug":227},{"title":201,"content":390,"auteurCopy":201},"\u003Cp>Lorem ipsum dolor sit amet, consectetur adipiscing elit. Phasellus suscipit at lacus vitae malesuada. Maecenas lectus tellus, pulvinar nec lectus eu, aliquet pulvinar odio. Ut lorem mauris, facilisis id suscipit non, fringilla ut ante. Quisque semper tincidunt maximus. Aliquam risus justo, accumsan sed rutrum tempus, porta ac est. Curabitur tempor dignissim ex ac sagittis. Sed molestie dapibus metus vehicula tincidunt. Pellentesque non pretium quam. Integer turpis diam, pharetra vitae finibus sed, aliquam vel odio.\u003C/p>\n",{"nodes":392},[393],{"id":352,"name":353,"slug":354},{"id":395,"title":396,"uri":397,"slug":398,"date":399,"modified":400,"status":217,"language":401,"translations":402,"insightFields":407,"insightCategories":409},"cG9zdDoxMDY3","The shareholders’ agreement: a solid foundation for sustainable collaboration","https://www.thisisinc.com/en/insights/shareholders-agreement/","shareholders-agreement","2025-11-21T10:51:05","2026-01-13T11:11:45",{"code":219,"slug":220},[403],{"id":404,"uri":405,"language":406},"cG9zdDo1NTc=","https://www.thisisinc.com/insights/aandeelhoudersovereenkomst/",{"code":226,"slug":227},{"title":201,"content":408,"auteurCopy":201},"\u003Cp>Starting a business with multiple founders is often a challenging and intensive process. In the early stages, founders have a lot to deal with: choosing the right legal form (\u003Ca href=\"https://www.thisisinc.com/en/insights/idea-to-startup/\">read more about this here\u003C/a>), attracting financing and developing the product or service. There is a high level of mutual trust. It is precisely at this point that it is important to lay down agreements on mutual collaboration, but above all to make agreements on how to deal with the early departure of one or more co-founders. In order to avoid complicated negotiations or conflicts, every founder who goes into business with others would be well advised to conclude a shareholders’ agreement.\u003C/p>\n\u003Cp>Shareholder agreements regulate who bears which responsibilities and who contributes what (labour, knowledge, network, but also money or intellectual property). Agreements must be made about how important decisions are taken and what happens if not everyone is on the same page. In addition, the shareholders’ agreement regulates when someone is a bad leaver, early leaver or good leaver and, above all, what the consequences of this should be.\u003C/p>\n\u003Cp>By making clear agreements, the start-up is assured of a good start and its founders are prepared for future challenges. In this article, we briefly discuss the relationship between the articles of association and the shareholders’ agreement and discuss in detail what you should include in a shareholders’ agreement.\u003C/p>\n\u003Ch2>What is the relationship between the articles of association and the shareholders’ agreement?\u003C/h2>\n\u003Cp>When establishing a private limited company, it is a legal requirement to draw up articles of association. The articles of association form the legal basis of the private limited company and contain the main rules relating to the internal structure of the company. The articles of association include the purpose of the private limited company, the types of shares, the bodies of the private limited company and the powers of these bodies. The articles of association are publicly available via the trade register of the Chamber of Commerce.\u003C/p>\n\u003Cp>Drawing up a shareholders’ agreement is not mandatory, but it is strongly recommended. In this agreement, shareholders can make additional arrangements to give their collaboration a more concrete and practical form. These include agreements on the division of tasks, decision-making and exit arrangements. This agreement only applies between the shareholders themselves and is not publicly available to third parties.\u003C/p>\n\u003Ch2>What should you include in a shareholders’ agreement?\u003C/h2>\n\u003Cp>Below, we will discuss a number of important topics that should be included in the shareholders’ agreement. This list is not exhaustive. It is advisable for every company to carefully consider which specific agreements are important to make.\u003C/p>\n\u003Ch3>01      Commitment and vesting\u003C/h3>\n\u003Cp>Shareholders may agree to commit themselves to each other and to the company for a certain period of time. This allows you to create certainty and stability for the company. For example, shareholders may agree not to sell their shares for a period of five years. This is also referred to as a lock-up period. Such a commitment is also sometimes combined with a side activities clause, which means that the founders are available to the start-up on a full-time basis and will not engage in any other business activities alongside the start-up.\u003C/p>\n\u003Cp>In addition, you can agree on a vesting arrangement. This means that shareholders receive their full share package from day one, but that the shares they hold will “vest” over a period of, for example, four or five years (reversed vesting). The vesting arrangement may, for example, stipulate that none of the shareholding is vested at the time of incorporation, that 20% is vested after one year (also known as a cliff) and that the remaining 80% vests in monthly instalments over the following 36-48 months. At the end of the four- or five-year vesting period, all shares allocated to the shareholder will be fully vested. The vesting clauses are usually linked to a leaver arrangement, in which a distinction can be made between a good leaver, an early leaver and a bad leaver.\u003C/p>\n\u003Cul>\n\u003Cli>A good leaver could be, for example, a shareholder who transfers their shares as a result of death, permanent incapacity for work or because of necessary informal care. The shares of a good leaver are generally valued at fair market value.\u003C/li>\n\u003Cli>An early leaver could be, for example, a shareholder who terminates their management or employment contract before the expiry of a certain term, for example within the lock-up period or within the vesting period. The vested shares of the leaver must be offered at market value (or at a limited discount thereto) or may be retained, while unvested shares must generally be surrendered without compensation.\u003C/li>\n\u003Cli>Examples of bad leavers include shareholders who act in breach of the shareholders’ agreement or the articles of association, or whose management or employment contract is terminated due to embezzlement, fraud or inappropriate behavior in the workplace. The bad leaver penalty is often substantial: both vested and unvested shares must be surrendered without the shareholder receiving any of the market value, at most the original purchase price.\u003C/li>\n\u003C/ul>\n\u003Cp>Which vesting schedule is reasonable and what the consequences should be of a classification as a \u003Cem>good\u003C/em>, \u003Cem>early\u003C/em> or \u003Cem>bad\u003C/em> \u003Cem>leaver\u003C/em> is always a matter of customization and depends on all the circumstances of the specific case.\u003C/p>\n\u003Ch3>02      Decision-making\u003C/h3>\n\u003Cp>One of the most important parts of a shareholders’ agreement is to set out how decisions are made.\u003C/p>\n\u003Cp>The most important bodies within a private limited company are the board of directors and the general meeting of shareholders. The law and the articles of association largely determine which body is authorized to take which decisions. Additional agreements regarding decision-making within the company can be laid down in a shareholders’ agreement.\u003C/p>\n\u003Ch4>\u003Cem>Board\u003C/em>\u003C/h4>\n\u003Cp>The board is responsible for the day-to-day management of the company. This day-to-day management also includes decisions on hiring or dismissing staff, making investments and purchasing goods or services. However, some board decisions have such an impact on the company that shareholders wish to have a say in them. These decisions can be subject to a right of approval by the general meeting in the shareholders’ agreement. In this way, shareholders without a seat on the board still have a certain degree of control over the company. It is important to realize that this agreement only works internally: a decision that is taken in contravention of the shareholders’ agreement often remains legally valid in relation to third parties. Internally, however, this may constitute a breach of contract, as a result of which the parties involved may be held liable for performance or damages.\u003C/p>\n\u003Cp>Examples of management decisions that may be subject to approval include decisions on financial obligations and investments. These include entering into obligations exceeding €100,000; concluding commercial contracts exceeding €250,000; attracting new financing; making investments (CapEx) or providing financing to third parties. In this way, shareholders retain a certain degree of influence over the financial position of the company.\u003C/p>\n\u003Cp>In addition, management decisions relating to the conclusion or termination of agreements with shareholders or directors of the company may also be subject to approval. This gives shareholders a say in the governance of the company.\u003C/p>\n\u003Cp>Finally, a right of approval can be linked to strategic business decisions, such as entering into or terminating partnerships, implementing changes in business activities, and determining the business plan and budget. This gives shareholders a say in the direction and future of the company.\u003C/p>\n\u003Ch4>\u003Cem>General meeting (of shareholders)\u003C/em>\u003C/h4>\n\u003Cp>The general meeting is regarded as the body with the highest authority within a company. The law grants the general meeting a number of powers, including the adoption of the annual accounts; the appointment, suspension and dismissal of directors; and decisions on amendments to the articles of association, mergers/demergers or the distribution of dividends. The general meeting has far-reaching authority because its members are the ultimate owners of the company and therefore bear the economic risk.\u003C/p>\n\u003Cp>The main rule is that the general meeting decides by majority vote. This means that a decision is adopted if 50% + 1 vote of the votes cast is in favor. In the shareholders’ agreement, you can make different arrangements, for example regarding minimum attendance at a meeting (quorum) and qualified majorities.\u003C/p>\n\u003Ch4>\u003Cem>Qualified majority\u003C/em>\u003C/h4>\n\u003Cp>A qualified majority means that certain decisions of the general meeting can only be taken with a larger majority of votes. Often, a qualified majority requires at least two-thirds of the votes. Unanimous decisions are also possible. However, please note that certain decisions are subject to mandatory legal provisions regarding quotas. For example, a decision to dismiss a director may require a qualified majority of votes, but that majority can never exceed two-thirds of the votes. For this reason, this ratio is often included as the standard ratio for all decisions that must be taken by qualified majority.\u003C/p>\n\u003Cp>In addition to the standard qualified majority, an investor majority may also be agreed. This means that a decision can only be taken if a majority of investors (often holders of a specific class of shares, such as preferred shares) agree to it. This gives investors extra security, particularly in cases where they do not hold a simple majority of all shares.\u003C/p>\n\u003Ch4>\u003Cem>Quorum requirement\u003C/em>\u003C/h4>\n\u003Cp>A quorum means that a certain percentage of the issued capital must be present, for example 75%, in order to be able to take (all or certain) legally valid decisions at the general meeting. Please note that the law also imposes certain requirements on quorums; for example, the quorum required for the dismissal of a director may not exceed two-thirds of the authorized capital.\u003C/p>\n\u003Ch4>\u003Cem>Deadlock\u003C/em>\u003C/h4>\n\u003Cp>In the context of decision-making, a deadlock situation can sometimes arise: an impasse (in a 50/50 situation) in which decision-making within the general meeting or the board becomes impossible because the parties are unable to reach a joint decision. When half of the shareholders vote in favour and the other half vote against, no decision can be taken. This can be detrimental to the business operations and continuity of the company.\u003C/p>\n\u003Cp>Therefore it is important to include a deadlock clause in the shareholders’ agreement. In such a clause, you lay down what happens if a deadlock situation arises. For example, you can assign a casting vote to a third party. You can also opt for mediation or arbitration. You can even agree that a shareholder must sell their shares or be obliged to buy the other shareholder’s shares in the event of a deadlock situation.\u003C/p>\n\u003Ch3>03      The transfer of shares\u003C/h3>\n\u003Cp>In the early stages of a partnership, the focus is often on starting up and growing the business. However, it is also a good idea to consider the possible end of a partnership at this stage. Under what conditions may a shareholder transfer his shares? And what agreements apply in that case?\u003C/p>\n\u003Cp>If a lock-up period has been agreed, shareholders may not transfer their shares during this period. Only after this period has expired may a shareholder transfer his shares, subject to the conditions laid down in the law, the articles of association and the shareholders’ agreement.\u003C/p>\n\u003Cp>The law stipulates an obligation to offer: a shareholder who wishes to sell his shares must first offer them to the other shareholders. This guarantees the private nature of the private limited company. The articles of association and the shareholders’ agreement may deviate from this, for example on the basis of the following two provisions:\u003C/p>\n\u003Cul>\n\u003Cli>A shareholder who wishes to sell his shares and has received an offer from a third party must first offer the shares to the other shareholders at the same price and on the same terms. This is also known as the right of first refusal. If the co-shareholders do not exercise this right within the agreed period (e.g. 30 days), the selling shareholder may transfer the shares to the third party.\u003C/li>\n\u003Cli>A shareholder who wishes to sell his shares must first notify the other shareholders in writing. He must state the price and conditions under which he is prepared to transfer the shares. The other shareholders can then accept this offer within the agreed period (usually 30 days). This is also known as the right of first offer. If the other shareholders do not accept the offer, the selling shareholder may offer the shares to a third party. However, this may not be done on terms more favorable than those offered to the other shareholders.\u003C/li>\n\u003C/ul>\n\u003Cp>The above rules are often accompanied by exceptions. For example, a transfer of shares for tax optimization purposes, without a change of control taking place, should be possible. Investment funds often stipulate exceptions for other affiliate transfers, so that the fund has the freedom to restructure the fund structure.\u003C/p>\n\u003Ch4>\u003Cem>Mandatory offer\u003C/em>\u003C/h4>\n\u003Cp>Shareholders may agree that they are obliged to transfer their shares in certain situations. For example in case of:\u003C/p>\n\u003Cul>\n\u003Cli>Termination of the management agreement (which may also be grounds for leaving, see above);\u003C/li>\n\u003Cli>Long-term incapacity for work;\u003C/li>\n\u003Cli>Death (in which case the obligation rests with the heirs);\u003C/li>\n\u003Cli>Change of control (if the shareholder is a company);\u003C/li>\n\u003C/ul>\n\u003Ch4>\u003Cem>Drag Along and Tag Along\u003C/em>\u003C/h4>\n\u003Cp>Drag-along and tag-along provisions may be included in the shareholders’ agreement. A drag-along provision enables shareholders who wish to sell their shares to a third party to compel the other shareholders to participate in the transaction on the same terms. This clause may be included to enable the sale of 100% of the shares to a third party. It is a common provision whereby majority shareholders can compel minority shareholders to participate in a sale. A good drag-along provision is considered a prerequisite for achieving a good exit value without minority shareholders being able to obstruct the process, but proper arrangements to protect minority shareholders are a must.\u003C/p>\n\u003Cp>Whereas a drag-along right is intended to strengthen the position of majority shareholders, a tag-along right is intended to protect minority shareholders. It prevents minority shareholders from finding themselves in a situation where all major shareholders sell their interests to a third party, leaving the minority shareholder with one or more new shareholders. A tag along right can be activated when, for example, 40% or more of the shares in the company are offered to a third party, with the result that the minority shareholders can participate in the transaction with the third party and sell a proportionate share of their shares on identical terms. Specific (co-)founder tag along provisions also occur.\u003C/p>\n\u003Ch4>\u003Cem>Valuation\u003C/em>\u003C/h4>\n\u003Cp>The shareholders’ agreement can set out guidelines for the valuation of the shares. The valuation can then be determined in advance, thereby preventing any discussion on this matter at the time of sale. You can also distinguish between good leavers and bad leavers. Make agreements about the process, timelines and costs.\u003C/p>\n\u003Ch2>Conclusion\u003C/h2>\n\u003Cp>Many conflicts between shareholders arise because agreements have not been clearly laid down in advance. A sound shareholders’ agreement guarantees the continuity of the company and prevents costly legal proceedings. The above provides an indication of the topics that need to be agreed upon in a shareholders’ agreement. It is important to tailor these agreements specifically to the company in question, its business model and the shareholders involved.\u003C/p>\n\u003Cp>The INC. team offers comprehensive support in formalizing the partnership in a shareholders’ agreement and establishing a company. Please feel free to contact us to discuss your specific situation.\u003C/p>\n",{"nodes":410},[411,412],{"id":348,"name":349,"slug":350},{"id":352,"name":353,"slug":354},{"id":414,"title":415,"uri":416,"slug":417,"date":418,"modified":419,"status":217,"language":420,"translations":421,"insightFields":426,"insightCategories":428},"cG9zdDoxMDY0","Convertible Loans (CLAs): A guide for startup founders and investors","https://www.thisisinc.com/en/insights/convertible-loan-agreements-netherlands/","convertible-loan-agreements-netherlands","2025-11-21T09:27:15","2026-01-13T10:32:43",{"code":219,"slug":220},[422],{"id":423,"uri":424,"language":425},"cG9zdDo1NjI=","https://www.thisisinc.com/insights/convertible-loan-agreements/",{"code":226,"slug":227},{"title":201,"content":427,"auteurCopy":201},"\u003Ch2>Why convertible loans matter in early-stage funding\u003C/h2>\n\u003Cp>For innovative startups, securing early-stage funding is crucial for product development and market entry. Traditional bank loans remain largely inaccessible at this stage, making convertible loans from investors an attractive alternative. Convertible loans appear straightforward: minimal paperwork, no immediate involvement of a civil law notary, no valuation discussions yet and templates readily available online. This simplicity makes them an appealing funding mechanism for cash-conscious founders. At face value, the convertible loan appears the simplest and cheapest way of financing. But this apparent simplicity masks important complexities.\u003C/p>\n\u003Cp>Many founders and investors underestimate the implications of CLAs. The true cost of equity only becomes clear at conversion, which can lead to unexpected dilution for founders or disappointing returns for investors. This uncertainty explains why some experienced investors avoid CLAs entirely.\u003C/p>\n\u003Cp>CLAs typically restrict a founder’s operational freedom, with many decisions requiring lender approval during the loan period. This guide equips you with the essential knowledge to negotiate CLAs strategically, avoiding the pitfalls of generic templates that frequently favor investor interests.\u003C/p>\n\u003Ch2>After reading this guide, you will know:\u003C/h2>\n\u003Cul>\n\u003Cli>The fundamental structure and mechanics of convertible loans\u003C/li>\n\u003Cli>Strategic advantages of CLAs for both startups and investors\u003C/li>\n\u003Cli>Critical negotiation points that protect founder interests\u003C/li>\n\u003Cli>Key clauses and terms to master before signing any agreement\u003C/li>\n\u003C/ul>\n\u003Ch3>01        What Exactly Is a Convertible Loan Agreement (CLA)?\u003C/h3>\n\u003Cp>A \u003Cem>convertible loan\u003C/em> or CLA is a loan agreement in its core: the lender provides a cash payment under the terms of the CLA and interest accrues on the principal amount funded. After a certain amount of time, the loan will be repaid to the lender. The difference between a regular loan agreement and a convertible loan agreement is that repayment takes place \u003Cem>by way of \u003C/em>conversion into shares or depositary receipts of such shares at a later date – at a \u003Cem>conversion event\u003C/em> or \u003Cem>trigger event\u003C/em>. When the loan is converted into shares at such a conversion event, the company issues shares to the lender, which settles the consideration for the share issuance against its loan plus accrued and unpaid interest. In short: it’s an interest bearing pre payment for a future issuance of shares, at a valuation to be determined at the time of such issuance.\u003C/p>\n\u003Ch3>02       Common Trigger Events\u003C/h3>\n\u003Cp>The trigger events thus determine when the convertible loan is converted into shares. Reaching the \u003Cem>maturity date\u003C/em> of the loan is often one of those conversion events: at the end of the duration of the loan agreement, the loan (often at discretion of the investor or lender) is either repayable or convertible into shares. Another trigger event is closing a \u003Cem>Qualified financing\u003C/em> or \u003Cem>Next equity financing\u003C/em>: if a new investment round closes during the duration of the CLA, the investor is allowed to convert at the same price and at equal terms as the investors in the new investment round, sometimes with a \u003Cem>discount\u003C/em> (on discounts, read more below). \u003Cem>Liquidity events\u003C/em> or an \u003Cem>Exit\u003C/em> are common triggers for conversion, a Liquidity event often to be understood as a sale of the company or all or a substantial part of the assets of the company. Finally, an \u003Cem>Event of Default\u003C/em> is often a trigger event. An Event of Default may occur, for example, if the company fails to comply with the terms of the CLA, is declared bankrupt, ceases its business activities or changes the nature of its business.\u003C/p>\n\u003Cp>There is not ‘one ultimate’ CLA template. CLA’s with conversion at \u003Cem>maturity\u003C/em> or at the time of a \u003Cem>Qualified Financing\u003C/em> at a valuation to be determined (or at the valuation at the Qualified Financing) are most common in practice. However, convertible loans that will always convert are becoming more popular, because they might convert at a predetermined price per share, whether or not in combination with a method to adjust the price in the interim (also called an \u003Cem>Adjustment event\u003C/em>). Also on the rise is the \u003Cem>Fixed percentage convertible note\u003C/em>: a convertible loan that upon conversion yields a fixed percentage of all shares in the company. A commonly known version of such an instrument is a SAFE.\u003C/p>\n\u003Ch3>03       Strategic Advantages of Convertible Loans\u003C/h3>\n\u003Cp>\u003Cem>Solving the Early-Stage Valuation Challenge\u003C/em>\u003C/p>\n\u003Cp>Valuing early-stage companies presents inherent difficulties. Traditional methods like EBITDA multiples or discounted cash flow analyses fail to capture growth potential. With a CLA, valuation may be postponed until such a time when the start-up has already established a financial track record and has a more robust growth trajectory. In most cases, it is also possible to tie in with the valuation of a future investor (with Qualified Financing).\u003C/p>\n\u003Cp>\u003Cem>Tax Benefits for Investors\u003C/em>\u003C/p>\n\u003Cp>For the investor, the CLA provides a potential tax incentive for when the startup fails. Investors are able to write of (part of) the loan, which write-offs are often tax deductible. Until the moment of conversion, the investor qualifies as a regular creditor, which means payment before any shareholders in case of bankruptcy. Only after conversion, the lender becomes a shareholder (or holder of depositary receipts of shares).\u003C/p>\n\u003Cp>\u003Cem>Expedited Funding Process\u003C/em>\u003C/p>\n\u003Cp>Another advantage of the CLA is the speed with which it can be settled. CLAs can dramatically accelerate fundraising. The documentation primarily requires loan basics (duration, interest rate) plus robust conversion provisions, eliminating immediate notarial involvement and postponing shareholder agreement negotiations.\u003C/p>\n\u003Ch3>04       Hidden Cost Considerations\u003C/h3>\n\u003Cp>While CLAs defer certain expenses, conversion ultimately requires notarial deeds for share issuance. Conversion of several convertible loans at the same time can initiate complex negotiations around valuation, cap table calculations and shareholder rights, especially when conversion is triggered due to a Qualified Financing or when the investor pool comprises a large number of angel investors (that may have invested through sharefunding platforms).  Understanding these eventual costs and the effort it will require from the management team, remains essential for proper planning.\u003C/p>\n\u003Ch3>05       Critical Considerations for CLA Negotiations\u003C/h3>\n\u003Cp>Founders and investors should address these key points during negotiations:\u003C/p>\n\u003Cp>\u003Cem>Legal Requirements\u003C/em>\u003Cem>:\u003C/em>\u003Cem> \u003C/em>Under Dutch corporate law, CLAs qualify as “rights to a future share issuance,” requiring a shareholder resolution and potentially triggering preemptive rights unless excluded. Proper documentation of a shareholder resolution (and sometimes supervisory board approvals) are legally necessary.\u003C/p>\n\u003Cp>\u003Cem>Template Pitfalls\u003C/em>\u003Cem>:\u003C/em>\u003Cem> O\u003C/em>nline templates may favor investor interests, particularly regarding warranties and covenants. These provisions can significantly restrict your operational freedom, requiring lender approval for even routine business decisions. Speed of governance and preventing blocking votes minority lenders, is essential to a startup, so make sure approval procedures are light and fast. Both investors and founders should be wary of these pitfalls.\u003C/p>\n\u003Cp>\u003Cem>Valuation Methodology:\u003C/em> While CLAs postpone valuation discussions, they don’t eliminate them. Consider pre-agreeing on valuation approaches for conversion scenario’s outside of a qualified financing. Also consider adding cap table scenario’s so all parties involved have a clear view on the method of calculation the issue price and dilution.\u003C/p>\n\u003Cp>\u003Cem>Valuation Cap Considerations:\u003C/em>\u003Cem> \u003C/em>Valuation caps exclusively benefit investors, potentially granting them larger equity stakes than warranted by the company’s actual value or expected, resulting in greater founder dilution. Negotiate these carefully or consider alternatives.\u003C/p>\n\u003Cp>\u003Cem>Series A Investor Privileges:\u003C/em>\u003Cem> \u003C/em>Think ahead and be wary of the standard clause found in nearly all templates that gives the CLA holder equal rights and an equal position as a prospective Qualified Financing investor. These investors often receive significantly more favorable (financial) conditions such as \u003Cem>liquidation preferences \u003C/em>and \u003Cem>down-round protections\u003C/em>, which would in turn also apply to the CLA investor. Especially if the CLA holder receives many more shares through a \u003Cem>Cap\u003C/em> or a \u003Cem>Discount\u003C/em> than you would expect based on his deposit, a liquidation preference can cost the founder dearly. Limit it to the cash-invested amounts and, if necessary, create another (shadow) class of shares.\u003C/p>\n\u003Cp>\u003Cem>Employee Incentive Planning:\u003C/em> Want to set up an \u003Cem>employee incentive plan\u003C/em>? Then make room for employee participation now and make sure you negotiate the \u003Cem>ESOP\u003C/em> or \u003Cem>Employee incentive plan \u003C/em>and which (current or future) shareholders will be diluted by such incentive plan.\u003C/p>\n\u003Cp>\u003Cem>Shareholder Agreement Strategy:\u003C/em>\u003Cem> \u003C/em>Post-conversion shareholder agreements protect investor interests, but founders must also safeguard their position. Ideally, negotiate key shareholder agreement terms before finalizing the CLA to maintain leverage, as your negotiating power typically diminishes post-investment. In the case of a conversion due to a Series A funding, the negotiations for a shareholder agreement might become complex and the holder of the CLA sometimes gets a strong negotiating position.\u003C/p>\n\u003Ch3>06       Essential CLA Terms and Clauses Explained\u003C/h3>\n\u003Cp>Understanding these common provisions will strengthen your negotiating position:\u003C/p>\n\u003Cp>\u003Cem>Principal Amount:\u003C/em> The investment sum, which may be provided as a lump sum, milestone-based tranches, or on-demand. Once provided, principal amounts typically become non-repayable except through conversion or at maturity. Founders should seek automatic conversion (as opposed to optional conversion) provisions where possible.\u003C/p>\n\u003Cp>\u003Cem>Interest Rate:\u003C/em> Interest accumulates on the principal until conversion or repayment. Unlike conventional loans with regular payments, interest on convertible loans or notes typically compounds until conversion. Founders should negotiate simple (non-compounding) interest rates between 4-8%.\u003C/p>\n\u003Cp>\u003Cem>Maturity Date:\u003C/em> The loan’s expiration date, which often triggers conversion or repayment rights. Typical periods range from one year (short) to three years (standard) to five+ years (extended).\u003C/p>\n\u003Cp>\u003Cem>Discount Rate:\u003C/em> When conversion occurs during qualified financing, CLA holders typically receive a discount on the price paid by new investors, rewarding their earlier risk. Discount percentages directly impact founder dilution.\u003C/p>\n\u003Cp>\u003Cem>Valuation Cap:\u003C/em> This sets a maximum company valuation for conversion calculations, increasing their return on investment. With a €5 million cap and and a fully diluted share capital of 10,000 shares or share equivalents, a €1 million CLA would yield 2,000 shares or 16.67%. In that same scenario, but with a €3 million valuation cap, the same CLA would yields 3,334 shares or 25%. The difference can be significant.\u003C/p>\n\u003Cp>\u003Cem>Conversion Calculation:\u003C/em> The formula determining share price at conversion significantly impacts equity distribution. Commonly used formula for calculating the price per share is the \u003Cem>pre-money valuation\u003C/em> divided by the company’s \u003Cem>fully diluted capitalization\u003C/em>. Make sure that all parties are on the same page regarding the exact meaning of those terms; the devil is often in the details. A \u003Cem>fixed percentage convertible\u003C/em> is also possible, where the investor obtains a predetermined percentage of the share capital upon conversion. Yet another variant is a \u003Cem>predetermined valuation\u003C/em>, possibly combined with an \u003Cem>adjustment event\u003C/em>; an event on the basis of which the predetermined valuation is adjusted again. In any case, add cap table scenario’s to make sure everyone is on the same page.\u003C/p>\n\u003Cp>\u003Cem>Conversion Shares:\u003C/em> These provisions determine what class of shares investors receive upon conversion. Typically the CLA converts into the most senior shares available upon conversion at maturity or converts into the class of shares issued in the qualified financing that triggered conversion. Founders should carefully consider implications of share classes, particularly regarding liquidation preferences (be wary of phantom liquidation preferences and liquidation preference overhangs). In the Dutch market, it is typical for angel investors to convert into depositary receipts of shares, issued by a trust foundation (STAK) that holds the shares in trust on behalf of the investors. Where the Dutch STAK structure is tax neutral (or ‘transparent’) when setup right, US based investors in Dutch companies should verify the tax implications of a trust structure.\u003C/p>\n\u003Cp>\u003Cem>Shareholder Agreement Provisions:\u003C/em> Post-conversion governance requires careful planning. CLA documentation often specifies that converted investors receive “standard” minority protections, but these can vary dramatically. Be cautious about provisions granting CLA holders the same rights as later-stage investors with larger investments, as this creates disproportionate influence.\u003C/p>\n\u003Cp>\u003Cem>Collateral Provisions:\u003C/em> Unlike bank financing, CLAs rarely include collateral requirements. This increases investor risk, partly explaining the higher interest rates and equity upside. While CLA holders rank ahead of shareholders in bankruptcy scenarios, unsecured creditor recovery rates typically remain minimal.\u003C/p>\n\u003Cp>\u003Cem>Warranties:\u003C/em> CLA investors typically request basic warranties regarding proper company incorporation and authorization. Tech startups should expect additional intellectual property warranties confirming ownership and registration status.\u003C/p>\n\u003Cp>\u003Cem>Covenants:\u003C/em> Unlike shareholders with statutory rights, CLA investors remain creditors until conversion. As creditors, they don’t have any rights regarding decision making, atleast not with added terms in convertible loan agreements. Consequently, CLAs often include covenants granting information rights to investors and approval requirements for certain corporate actions or business decisions. These operational restrictions frequently surprise founders, or are overlooked.\u003C/p>\n\u003Cp>\u003Cem>Most Favored Nation Clauses:\u003C/em> to the extent that raising additional convertible loans or issuing new shares is not blocked by covenants, CLA holders sometimes ask for most favorite nation treatment, meaning they are compensated for any more favorable terms given to any subsequent lender. The most favorite nation can be limited to financial terms, such as valuation, cap, discount, but also, for example, a liquidation preference. Overly broad MFN clauses can severely limit future financing flexibility.\u003C/p>\n\u003Ch2>Expert Legal Support for Your Funding Journey\u003C/h2>\n\u003Cp>Navigating convertible loan agreements requires strategic legal guidance tailored to your specific business model and growth trajectory. Our specialized team provides comprehensive support for startup and scale-up founders and their investors throughout their funding journey, from pitch deck design to cap table modelling, to initial negotiations through conversion and beyond.\u003C/p>\n\u003Cp>Contact INC. to discuss your specific funding needs and ensure your interests remain protected through every stage of your growth.\u003C/p>\n",{"nodes":429},[430,431],{"id":348,"name":349,"slug":350},{"id":352,"name":353,"slug":354},{"id":433,"title":434,"uri":435,"slug":436,"date":437,"modified":438,"status":217,"language":439,"translations":440,"insightFields":445,"insightCategories":447},"cG9zdDoxMDYz","From idea to start-up: a guide for start-up founders","https://www.thisisinc.com/en/insights/idea-to-startup/","idea-to-startup","2025-11-21T09:17:25","2026-01-22T12:49:14",{"code":219,"slug":220},[441],{"id":442,"uri":443,"language":444},"cG9zdDo1Njg=","https://www.thisisinc.com/insights/van-idee-naar-startup/",{"code":226,"slug":227},{"title":201,"content":446,"auteurCopy":201},"\u003Cp>A business starts with a good idea: innovation that has the potential to make people’s lives easier or better. While the focus from that moment on is on developing the product or service, finding customers and working out the marketing strategy, one important aspect is sometimes overlooked: the legal side of doing business.\u003C/p>\n\u003Cp>From the moment they decide to turn their business idea into reality, entrepreneurs are faced with important legal choices: which legal form best suits their plans? Which licenses are required? What liability risks do you run and how can you protect yourself against them? These questions are not only relevant for large companies. Successfully bringing the idea to market requires a solid plan and a good understanding of the legal and tax aspects involved. This article provides a comprehensive guide for start-up entrepreneurs and answers the most common questions to help you make the right choices when setting up your business.\u003C/p>\n\u003Ch2>How do I start a business: which legal form is best suited to my (future) business?\u003C/h2>\n\u003Cp>When starting a business in the Netherlands, choosing the legal form is one of the first and most important decisions a founder must make. Each legal form has its own legal and tax consequences and determines how liability, control and profit distribution are regulated.\u003C/p>\n\u003Ch3>\u003Cem>Limited Liability Company\u003C/em>\u003C/h3>\n\u003Cp>Those who wish to limit personal liability and grow their business with shareholders or investors may opt for a limited liability company (LLC). An LCC has “legal personality” and can enter into agreements with others, such as contracts with suppliers and employment contracts with staff members. Except in cases of improper management, directors and shareholders are therefore not personally liable for the debts of the LCC (in formal legal terms, the liability of shareholders is limited to the capital they have contributed).\u003C/p>\n\u003Cp>The incorporation of an LCC is done by notarial deed: a notary is therefore required. The deed of incorporation contains the articles of association of the LCC. The articles of association determine, among other things, what types of shares can be issued, what rights are attached to those types of shares, who is authorized to represent the LCC (e.g. each director, or two directors jointly, other variants are conceivable), how decisions are made, etc. The deed of incorporation also issues shares to the founders, who thereby become shareholders.\u003C/p>\n\u003Cp>Establishing a company through a notary may sound like an expensive process, but nowadays there are several providers who offer largely online services. In such cases, the company can often be established within on or a few days. For a simple LLC with standard articles of association, this is often a good, inexpensive and quick option. For an LLC in which several co-founders will participate and in which investors will join in the short term, such standard deeds of incorporation are often insufficient and a subsequent amendment to the articles of association is required. This often ends up being more expensive in the long run.\u003C/p>\n\u003Cp>An LLC is a suitable legal form if you want to start a business with co-founders or other shareholders, because the capital can be divided among multiple shareholders. The LLC is also the sensible option if the company’s cost structure is high or if liability risks are high for other reasons. From a financial and tax perspective, it is wise to opt for an LLC if high profits are expected (in the long term).\u003C/p>\n\u003Cp>You should also opt for an LLC if the sale of the company (exit) is an objective. Shares in an LLC can be sold to a buyer, allowing the entire company (including contracts) changes ownership. The sale price can also be structured in a tax-efficient manner, so that the profit on the sale is not immediately taxed (participation exemption).\u003C/p>\n\u003Ch3>\u003Cem>Sole proprietorship\u003C/em>\u003C/h3>\n\u003Cp>A sole proprietorship is a simple form of business and is frequently used by freelancers and small businesses. Setting up a sole proprietorship is easy: you simply register with the Chamber of Commerce and do not need to involve a notary.\u003C/p>\n\u003Cp>Entrepreneurs with a sole proprietorship are fully (personally) liable for all debts of the company; there is no separation between private and business assets. The risk in the event of financial setbacks is therefore entirely borne by the entrepreneur. On the other hand, they can benefit from tax advantages such as the self-employed person’s allowance, start-up allowance, and SME profit exemption, which can certainly be attractive in the early years. Please note that above a certain level of profit, it is more advantageous from a tax perspective to operate through a private limited company. Assistance from an accountant or tax specialist is recommended.\u003C/p>\n\u003Cp>A sole proprietorship is a suitable form of business if there is no collaboration with a co-founder or partner, the investments in the business are limited, the operating costs are clear and manageable (since the entrepreneur is liable for debts to suppliers), and the liability risks are manageable.\u003C/p>\n\u003Cp>If one of the objectives is to sell the company (exit), then choosing a sole proprietorship is less obvious. The sole proprietorship cannot be sold as a whole; only the assets and liabilities of the sole proprietorship can be sold and transferred separately. The transfer of contracts is only possible with the cooperation of the contracting parties, which can cause uncertainty and complexity. If an exit is desired, an LLC is often the more obvious option.\u003C/p>\n\u003Ch3>\u003Cem>General partnership, limited partnership, professional partnership\u003C/em>\u003C/h3>\n\u003Cp>When you want to start a business together with one or more partners, a general partnership, limited partnership, or professional partnership can also be considered. These are forms of collaboration between two or more individuals. A professional partnership is a collaboration aimed at practicing a profession. This legal form is commonly used by lawyers, dentists, general practitioners, accountants, architects, and physiotherapists. If the activity does not involve practicing a profession but rather running a business, a limited partnership or a professional partnership is applicable. A general partnership consists of two or more partners, while a limited partnership consists of one or more managing partners and one or more limited partners: the investors who do not take an active role in management. In a professional partnership, the partners are liable for equal shares (for example, each for half, in a partnership with two partners), while partners in a general partnership are jointly and severally liable for all debts (each for the whole).\u003C/p>\n\u003Cp>The limited partnership is a variant of the general partnership, specifically intended to enable the company to be started with (silent) financiers (limited partners) alongside the managing partners who are responsible for day-to-day management. The managing partners are personally and jointly and severally liable; the limited partners are only liable for the amount they have contributed.\u003C/p>\n\u003Cp>No notarial deed is required to establish the above forms. Registration with the Chamber of Commerce is sufficient. However, it is advisable to lay down the terms of the partnership in an agreement. This should include agreements on contributions, power of representation, profit distribution, and termination of the partnership.\u003C/p>\n\u003Cp>The legislator intends to reduce the differences between the various forms of cooperation through the proposed Modernization of Partnerships Act.\u003C/p>\n\u003Ch3>\u003Cem>Interim conclusion \u003C/em>\u003C/h3>\n\u003Cp>The most common legal form (in startup and scale-up practice) is the LLC. This is a logical choice if the company’s commitment and potential is to grow into an (internationally) successful company with the help of multiple shareholders, which can ultimately be sold. Investors also prefer this legal form. For growth, investments, and risk diversification, the LLC is the preferred legal form for many scale-ups and startups. The LLC will be taken as the starting point below.\u003C/p>\n\u003Ch2>How do I ensure good governance?\u003C/h2>\n\u003Cp>Governance in an LLC refers to the way in which the company is managed and controlled. Governance concerns the distribution of responsibilities and powers between the various bodies and stakeholders. The basis for governance is laid down in the articles of association of an LLC. The articles of association contain basic provisions on how the LLC functions. If an LLC has multiple shareholders, it is advisable to make additional agreements in a shareholders’ agreement, where further governance agreements can be made.\u003C/p>\n\u003Ch3>\u003Cem>Shareholders’ agreement\u003C/em>\u003C/h3>\n\u003Cp>Shareholders’ agreements often contain additional agreements on the provision of information to shareholders, agreements on the dividend policy to be applied, clauses on special management and shareholder decisions that require a special majority (reserved matters), a clause that determines when shareholders are obliged to offer shares and when a founder qualifies as a leaver (and what the consequences of this will be). Shareholders’ agreements often also contain provisions on the protection of intellectual property (more on this later), confidentiality, (non-)competition, and agreements on a possible exit strategy, with accompanying drag-along and waterfall provisions. This article discusses all the ins and outs of a shareholder agreement.\u003C/p>\n\u003Ch3>\u003Cem>Additional regulations\u003C/em>\u003C/h3>\n\u003Cp>Are there multiple directors and has a specific division of tasks been agreed upon? If so, it may be beneficial to draw up board regulations. Board regulations supplement the articles of association and govern the internal working methods of the board. They contain agreements on the division of tasks between directors, decision-making within the board, meeting frequency and procedures, provision of information to shareholders and supervisory authorities, and powers to enter into important obligations. Approval requirements for certain decisions are also laid down, as are procedures in the event of conflicts of interest. If there is a supervisory body such as a supervisory board, then supervisory board regulations are recommended.\u003C/p>\n\u003Ch2>Intellectual property\u003C/h2>\n\u003Cp>Protecting intellectual property (IP) is often one of the first strategic legal steps that startups need to take. Contractually securing rights to software, trademarks, trade names, designs, and know-how ensures that value created actually belongs to the company, rather than to individual founders, employees, or freelancers who are involved in developing the products. Without proper clauses on IP transfer in employment contracts or freelance agreements, there is a risk of crucial rights remaining outside the company. In addition, timely registration of a trademark or design can prevent competitors from undermining your market position. In short, a solid IP strategy lays the foundation for investability and sustainable growth.\u003C/p>\n\u003Cp>Intellectual property plays an even more important role in spin-offs, for example from a university or after a split from an existing corporation. Often, the technology or concept has already been developed and is brought into the start-up through a license or transfer. It is crucial to make clear agreements about who owns the IP rights, what rights of use the spin-off will have, and whether there are any restrictions (e.g., territorial or in terms of scope). Agreements must also be made about future developments: do new inventions belong to the spin-off or to the original organization? Clear contractual provisions prevent discussions and make the spin-off more attractive to investors. Want to know more about a good strategy for intellectual property and its protection? Then read \u003Ca href=\"https://www.thisisinc.com/en/insights/ai-ip-copyright-in-commerciele-contracten/\">this article\u003C/a>.\u003C/p>\n\u003Ch2>Attracting investors\u003C/h2>\n\u003Cp>Startups have various financing instruments at their disposal, such as convertible loans (CLAs), SAFEs, subsidies, or an initial equity round, but of course also cash loans and current accounts from financiers. If investors are going to come on board sooner or later, it is essential to draw up a clear cap table from the outset and maintain it. A good overview of shareholders and potential dilution, for example through options granted, gives confidence to future investors and prevents discussions in later rounds. Transparency in the cap table is often the first part of an investor’s due diligence. You can read more about the different forms of investment \u003Ca href=\"https://www.thisisinc.com/en/services/funding-financing-investment/\">here\u003C/a>.\u003C/p>\n\u003Ch2>Commercial agreements and templates\u003C/h2>\n\u003Cp>Once the LLC has been properly structured in terms of governance and intellectual property and the cap table has been updated, the first commercial contracts can be concluded. A set of general terms and conditions of sale that are well tailored to the company is a good start. The general terms and conditions can then be applied to every customer or buyer. Well-drafted general terms and conditions ensure that the startup is well protected against common risks in day-to-day business operations, such as disputes regarding delivery or damage, but also non-payment.\u003C/p>\n\u003Cp>It is essential, especially for data-driven companies, to implement a solid privacy strategy and set it out in a privacy statement. From the outset, set up processes and systems in such a way that personal data is processed securely and in accordance with the rules. Under the GDPR, a startup that has personal data processed by a third party (e.g., a software supplier) may not simply hand over data. In that case, a processing agreement is mandatory. This agreement sets out arrangements for the handling of personal data, security measures, and liability. The absence of such agreements can lead to fines and reputational damage. For investors, it is also an important signal that the company takes its privacy and data management seriously. These documents therefore not only provide legal protection, but also contribute to reliability towards customers and investors.\u003C/p>\n\u003Ch2>Employee incentives\u003C/h2>\n\u003Cp>Attracting and retaining talent is crucial for a startup. A well-designed employee incentive plan, such as stock appreciation rights, stock options, or certificates via a trust office foundation, ensures that employees share in the value they help create. This strengthens commitment and makes the company more attractive as an employer and to investors. It is important that the structure is well thought out from a tax and legal perspective, so that surprises are avoided later on.\u003C/p>\n\u003Ch2>Exit strategy\u003C/h2>\n\u003Cp>Although an exit often seems a long way off, it is wise to consider this at an early stage. Investors will want to know what opportunities there are for future value creation, for example through a sale to a strategic party or a secondary sale to new investors. Including drag-along and tag-along provisions in the shareholders’ agreement provides clarity on how an exit can proceed in practice and prevents blockages at a crucial moment. Founders would be wise to do Exit math before all investment rounds and take liquidation preferences into account.\u003C/p>\n\u003Ch3>Conclusion\u003C/h3>\n\u003Cp>Choosing the right legal form, drawing up the relevant legal documents such as a shareholders’ agreement and general terms and conditions, and arranging practical and legal matters in a timely manner are crucial for a successful start. By seeking sound and timely advice and having your documents drawn up clearly and tailor-made, you can avoid common legal pitfalls. Entrepreneurship remains pioneering, but a solid legal foundation will elevate your company to a professional and high level. This will prepare your company for growth and scaling.\u003C/p>\n\u003Cp>INC.’s specialized team offers comprehensive support to founders of startups and scale-ups, as well as their investors, throughout the entire start-up process.\u003C/p>\n\u003Cp>Contact INC. to discuss your startup idea and how are can contribute to your succes.\u003C/p>\n",{"nodes":448},[449],{"id":352,"name":353,"slug":354},1777683804589]