Investments in growth companies

Venture investment agreements are entered into subject to specific conditions to offset the high risk associated with investments in early-stage companies. To begin with, investments are often relatively small, and therefore it makes no sense to pay expensive advisers for assisting in the investment round. We are used to working with investments at a highly specialized level while taking a cost-conscious approach.

Venture investments are high-risk capital injections that will provide the company with enough capital to reach its growth target until a new investment round, before it eventually reaches break-even and later an exit. For investors, it will be essential to obtain a reasonable protection of their investment.

Our startup & venture team specialises in the specific challenges that are common to this type of investments. With this knowledge we can effectively narrow down the options available and deliver a cost-conscious solution.

We offer advice on areas such as:

Term sheets

An investment in a growth company will typically start with the drafting of a term sheet. Term sheets set out the principal terms and conditions and serve as a basis for the subsequent negotiation of the investment and shareholders’ agreements. This ensures that the parties agree on the key terms before spending money on a full set of agreements. A good term sheet is therefore a necessary tool to be able to make investments in the most efficient and cost-effective manner.

Investment agreements

Most growth companies need external capital to scale their business. Once the term sheet is in place, the details must be written down in an investment agreement, which regulates, among other things, the information asymmetry between founders and investor and the financial terms. The content will always be subject to discussions, because the agreements address a number of issues relating to the cooperation between the company and the investor which both parties are interested in. That is exactly where our experience and advice can be helpful.

Convertible debt instruments and SAFEs

Convertible debt instruments and the US-inspired SAFE document can be attractive financing alternatives for growth companies when the time is not right for an investment round. Both should be drawn up having regard not only to the growth company but also to the investor as well as their joint journey and a possible exit. However, the SAFE document should be used with caution in a Danish context, as the instrument has difficulty finding its place in the Danish legal framework. We are ready to assist in finding the best solution for you.

Due diligence

Whether you are looking to buy, sell or invest in a growth company, a smooth due diligence process can save you from unpleasant surprises. We customize our due diligence process to the size and complexity of your business, providing you with a relevant decision-making basis. We scope the review and the requested reporting in consultation with our clients and are used to cooperating closely with the investor’s own due diligence team.