Konsultori Resource on Strategy & Legal Affairs: The best evergreen knowledge pieces curated from the web. Since 2016, this archive has been growing, collecting analyses, frameworks, and compelling case studies on our key topics. We handpick the most interesting articles for you to explore and dive deeper.
FlexKapG (FlexCo) introduced in Austrian company law
The recently enacted Flexibilization Act regulation on FlexKapG (or: FlexCo), a new company form, brings a long-awaited relief for the Austrian startup community. It enables startups to involve their teams in shaping the long-term success of the company. Brutkasten and Kleine Zeitung reported on the process of bringing the new regulation to life. The topic was also covered in detail in a webinar by Eit Manufacturing.
Konsultori’s experts also look at employee ownership and how it can be integrated into a broader strategy to maximize its impact.
Distribute equity shares fairly among all (co)founders
Many articles, reports and websites contain information and advice on how best to divide equity between several founders. It is striking how often different proportions are mentioned. Reasons given for this include “I started working some months before my co-founder”, “I came up with the idea of the company” or “I am more experienced than my co-founder”. Y Combinator has collected and analyzed these reasons and comes to the following conclusion: if you want your startup to be successful, you should share equity equally among all (co)founders. You can find the arguments for this as well as informative infographics on the topic here. Nevertheless, the discussion of who is actually a (co)founder and who is key personnel and how to deal with this is even more exciting and there is an article by Joel Spolsky here, which in my opinion contains a very good solution.
Involving employees in the startup: “Work for equity” makes it possible
Employee share ownership can not only provide start-ups with financial resources but also retain employees and thus talent. Austrian law offers a wide range of options. The participation of employees can range from comprehensive ownership, information and influence rights (equal to a shareholder) to pure participation in the proceeds in the event of an exit. You can get a good overview of the different forms of structuring here.
The board in front of the board
When larger companies work together with external investors, they form their own board specifically for this purpose. Its tasks are to support the founders, reflect on all decisions, provide constructive feedback and expand the existing network. However, many entrepreneurs do not receive funding – because they lack the above-mentioned help from the board members. So why wait to form a board? Charlie O’Donnell provides insights into how start-ups can also succeed in setting up and expanding a board. Read more here.
Phantom shares in Vienna
Voting rights in the company are the gold of startup owners. The Vienna Business Agency and inits have implemented the concept of phantom shares (participation rights in the startup, but no voting rights as virtual participation) for the first time in 6 startups. Exciting start-up financing and more here.