The term is used for financially stable companies with a good reputation, and who are well established in their industry. A blue-chip company is expected to be non-cyclical and should deliver attractive profits in good as well as in bad times. Typically, the company is among the top three in its industry with a well-respected brand. The term, as such, originates from poker.Read More »Blue-chip in difficult times?
In the warranty section of a share purchase agreement (SPA), the sellers are required to provide warranties regarding essential circumstances in the company and its operations. The warranties are generally made on the date when the seller and buyer sign the SPA.
Signing and closing
If the closing of the transaction (the point in time when the shares change owners) takes place at a later date than the signing date, it is often a hot topic to agree whether the warranties are made on the date of signing only or at signing and also at closing. Notably, in case there is an extended period between signing and closing, it is reasonable to require the seller to renew its warranties at closing.
It should be noted, however, that sellers never should agree to provide forward-looking warranties, i.e., not give warranties relating to events that may happen in the future. Further, sellers’ warranties should be made by each seller individually and severally, and not jointly and severally.Read More »Sellers’ Warranties
The SHA is an agreement among the largest owners in a company where the parties agree on what rules are to govern important ownership decisions, decisions at meetings of the shareholders and of the board of directors. Customary clauses which regulate joint ownership are clauses which govern business purpose, rights of first refusal, consents, and pre-emptive rights. Among other things, the agreement will regulate:Read More »The Shareholder Agreement – SHA
Resigning from the CEO role is a vital decision when you are the principal owner of the company. You must accept the handover to an outsider of not only the control of the business but also your life’s creation and the management of the family fortune. I have, for example, met family business owners, and entrepreneurs, who had their entire lifelong savings in only one share, i.e., in the stock of their company.
To step down from the top position of a business is complicated and will need time for those concerned to process, accept, and enforce. A prerequisite for the successful exchange of the CEO is the understanding, trust, and respect from all parties involved. All shareholders, the board of directors and the top tier management need to be aligned. It is even more challenging when the resigning CEO also is a principal owner and perhaps the founder of the company. It requires rigorous mental, emotional, and practical preparations that take time. It is a life-changing decision, and it’s hard to see all the future implications fully. One of the most important matters is finding out what to do next.
Industrifonden (a Swedish industrial development fund) is publishing The Swedish Tech Funding Report twice a year. The report provides insights into the investment activity in one of the world’s most active start-up ecosystems. The first half of 2016 shows an active venture tech market in Sweden, and especially in the Stockholm region. There are attractive companies to invest in as well as venture investors with sufficient funds.
Sweden is right now a good place to be in when investing in venture capital to boost young companies. I have since a couple of years had the privilege of being a member of the board of directors in Industrifonden. The fund invests in young companies with the potential to become global players impacting innovation and the development of Swedish enterprises – in Sweden as well as outside of Sweden. But first and foremost, Industrifonden backs ambitious people and teams with great visions, a strategic approach, and the ability to turn plans into reality.
To own a company, operate on a Board of Directors or have a senior position in a business is a complex and exciting task. To… Read More »Best wished for Christmas and a relaxing holiday
Today, there are three questions that all boards and management must ask themselves. They are:
- In what business are we?
- Who are our new competitors?
- How can we attract and retain talent?
I have in two previous blog posts addressed the first two questions. In this post, I share my views on the challenge of attracting and retaining creative talents.
The ability to attract creative and innovative employees today is as important as access to raw materials is to steelworks or paper mills, for example.
The commercial market battles will be determined by companies that can recruit and retain the very best people in all professional functions. Creativity and innovation are paramount to the success of a company. These companies develop superior and smarter products/services than competitors do.
The business model of Venture Capital (VC) and Private Equity (PE) is to invest in non-listed companies and after five to seven years sell the… Read More »When does venture capitalists create value