Startup investment attraction precautions, drafting an integrated shareholders' agreement between existing investors and new investors.

Law firm Veat received a request from startup A (hereinafter referred to as "the client") and drafted a unified shareholder agreement for existing and new investors.

The client was in a situation where they wanted to conclude a shareholder agreement with the same content as the existing investors during the process of attracting new investment, and worried about potential conflicts of rights between existing and new investors, so they sought out Law firm Veat to incorporate the new investor as a party to the existing shareholder agreement and to revise clauses that were vaguely stated.

Law firm Veat carefully reviewed the clauses of the shareholder agreement of the existing investor, and resolved the complexity of the process by drafting and concluding a unified shareholder agreement that includes all investors based on the opinions of the existing investors.

Key Clauses of the Unified Shareholder Agreement

The unified shareholder agreement clearly defines the rights and obligations of both existing and new investors in a single contract, minimizing conflicts between investors and maintaining a consistent equity structure. It is important to carefully review and revise the clauses of the existing agreement to ensure that the new investor’s participation as a party to the contract does not negatively impact the rights and obligations of the existing investors. This can prevent disputes that may arise during a startup’s growth process through the drafting of a unified shareholder agreement.

Based on extensive experience in investment advisory, Law firm Veat has considered the equity structure of the startup and the potential conflict of rights between investors, and has conducted a detailed review of each clause of the unified shareholder agreement to maintain consistency between the clauses, and through this adjustment process, has drafted a unified shareholder agreement that satisfies both existing and new investors.

Law firm Veat provides professional and systematic legal advice for stable and rapid investment attraction related to startup investment. In particular, it supports both investors and startups by providing customized legal services that consider the unique requirements of startups, and striving to provide conditions that are reasonable for both parties.

Seongho Choi, Representative Attorney of Law firm Veat, has been selected for the ‘Leading Lawyers 2024’ Corporate and M&A section for his main practice areas of investment & M&A, foreign investment, venture & startup, personal information, and blockchain. In addition, Law firm Veat was selected as a finalist in four categories: Korea Law Firm of the Year, Boutique Law Firm of the Year, Managing Partner of the Year (Boutique Firm), and Korea Deal Firm of the Year, in the “ALB Korea Law Award 2024”, and ranked 5th in Bloomberg League Table for the first half of 2024 in the Korean M&A market, demonstrating its important role in the domestic IT, startup, and M&A markets.

If you need legal advice related to startup investment, shareholder agreements, or subscription agreements, please contact Law firm Veat, which specializes in investment M&A.

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Law firm Veat