How Startups Should Navigate Shareholders’ Agreements

What should every Swiss founder know before scaling, fundraising, or bringing new people onto the cap table? Shareholders’ agreements are one of those topics that many founders know they need, but often delay until things get complicated. 

In the recent webinar hosted by the Swiss Startup Association, Thierry Thormann and Céline Spahn from Altenburger Ltd legal + tax opened with a real world example of three close friends who launched a company together. Everything looked straightforward until they hired employees, brought in friends and family, and eventually welcomed a major institutional investor. Suddenly their cap table, their voting structure, and even their board changed dramatically.

It was the perfect reminder that the moment your startup grows, your shareholders’ agreement becomes the silent foundation that protects your company from chaos.

If you missed the session, here is a quick walkthrough of the key insights and why this agreement matters more than most founders realize.

What a Shareholders’ Agreement Really Does

A shareholders’ agreement is a private contract between shareholders. It governs how they work together and how ownership functions. Unlike the articles of association, it is not public, it is not automatically binding for new shareholders, and it is much more flexible.

The Shareholders’ Agreement serves as the operational blueprint for your company. It defines decision-making protocols, voting mechanisms, share transfer rules, and conflict prevention measures. Critically, it supplements Swiss corporate law with tailored provisions that align with your company’s unique reality and future strategy.

Why Startups Need One Even When Things Feel Simple

Early on, everything feels clear. Founders trust one another, decisions come easily, and disagreement seems unlikely. But once new people join the cap table, that early clarity quickly turns into risk. A shareholders’ agreement helps you:

• Protect founders’ control
• Avoid deadlocks
• Prepare for fundraising
• Define roles and responsibilities
• Prevent unwanted shareholders
• Establish rules for exits or special events

It’s not about lacking trust, but about creating alignment.

Tailoring Governance to Your Company

While Swiss corporate law provides a foundational structure, it often requires further refinement to meet the dynamic needs of a startup. A Shareholders’ Agreement is the essential tool for this customization, allowing you to define:

• Board composition. E.g.: Investor X appoints one director; founder appoints two directors.
• Presence and voting quorums. E.g.: Requiring one investor-appointed director to be present for a valid board meeting.
• Veto or consent rights. E.g.: Major decisions (e.g., debt over CHF 500k, selling key assets) require prior written consent from Series A investors.
• Signing authority. E.g.: Dual-signature requirement for transactions exceeding CHF 20k (Management + Board member).
• Frequency and format of board meetings. E.g.: Meetings mandated at least quarterly; virtual meetings permitted.
• Responsibility allocation between board and management. E.g.: Board handles strategy and budget; Management handles daily operations and non-executive hiring.

These rules help founders maintain strategic direction even as new stakeholders join.

Financial Provisions That Protect You Over Time

Once funding enters the picture, your agreement becomes essential for financial clarity and protecting shareholder value. This includes:

• Subscription rights that prevent unwanted dilution. E.g.: Allows existing owners to maintain their percentage in new rounds.
• Liquidation preferences for investors. E.g.: Investors get their capital back (1x or 2x) first upon company sale.
• Dividend policies that match your stage. E.g.: Defines if, when, and which shareholders receive dividends (often none for startups).
• Anti dilution protection for down rounds. E.g.: Adjusts investor share price if the next funding round is at a lower valuation.
• Preemptive rights for existing shareholders. E.g.: Right to buy shares in future issuances to keep their ownership level.
• Transfer rules that prevent shares from moving unexpectedly. E.g.: Restricts who, when, and how shareholders can sell their stock.
• Tag along and drag along clauses for future exits. E.g.: Tag: Minority owners can join the sale of a majority owner. Drag: The majority can force the minority to sell in a good deal.

These clauses help avoid surprises and future conflicts.

Preparing for the Inevitable: Exits and Complex Scenarios

Every startup will eventually encounter a major event: a sale, dispute, founder exit, or unexpected crisis. A robust Shareholders’ Agreement ensures that the rules are defined before the pressure hits, preventing reactive decision-making in a crisis. It clarifies:

• Who negotiates on behalf of all shareholders
• Who bears liabilities in an exit
• How warranties are allocated
• How minority shareholders are protected
• How shares can or must be transferred in specific situations

It becomes the roadmap for what happens when the stakes are high.

Final Thoughts

A shareholders’ agreement is not a box to tick. It is one of the most powerful tools a startup has to stay aligned, protect its founders, welcome new investors, and set the stage for a successful exit. It evolves with your company.

If you want to dive deeper into how these agreements work in practice and hear the full case study, watch the recorded webinar in the SSA Education Library. It is available to all members.

Not a member yet? Join the Swiss Startup Association and access events, guidance, and a community built to support your startup journey.

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