Founders FAQ #6

The dups Founders’ FAQ is a compilation of the most common questions founders ask us about their startup, their fundraising or their relationship with investors.

I don’t feel like having someone checking on me all the time. Can we contractually agree on task division between me and the investor(s), and ensure I have enough freedom to manage my company?

Not only is it possible – it is recommended! It is crucial to address the expectations of all those involved at the beginning of the partnership and to be clear on task and role division, as well as the freedom (or lack thereof) left to the management team.

The process will often be as follows:

• The shareholders’ agreement will include a strict division of roles between shareholders, the board of directors and executive directors. The shareholders’ agreement will indicate the decisions that can be taken by the executive directors alone, and those that are the responsibility of the board of directors.
  For example: The decision to hire employees and/or freelancers whose wage exceeds 50,000 EUR/year is left to the board of directors.

• Reporting tools will be included in the shareholders’ agreement. This will enable investors who do not play an active role in the company to know what’s going on with the company and get involved if and when necessary.
  For example: A summary document with the key figures in relation to the company’s business – orders, invoices, estimated gross margin, cash flow, staff numbers, etc. – will be communicated quarterly to directors.

You have a question about corporate governance or other topics? Let’s have a chat, we’d be happy to help!