VC funds, angel investors seek safeguards in spousal partnerships
Venture capital (VC) funds and angel investors have started to seek more clarity from cofounders, who are also spouses, about their roles, responsibilities and any special rights given to either of them at the time of the company’s inception.
In several instances, founders often name their spouses as cofounders at the time of the inception of their venture. However, if the spouses choose to part ways after a few rounds of funding, at that time, dealing with that separation becomes messy for investors as they have to deal with disgruntled spouses who are also shareholders of companies.
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Offering CollegeCourseWebsiteIndian School of BusinessProfessional Certificate in Product ManagementVisitIIT DelhiCertificate Programme in Data Science & Machine LearningVisitMIT xPROMIT Technology Leadership and InnovationVisit“We have advised in eight such queries in the last two quarters, where investors are seeking more clarity regarding the shareholding agreements (SHA) between cofounders who are also the significant other,” said Ishika Tolani, practising advocate at Family Court in Mumbai.
“Nobody wants the shares to be stuck in acrimonious divorce cases for years, as it would badly affect the company’s value and
growth,” adds Tolani.
The investors are seeking details such as whether spouses have common stock or ‘class — B’ non-voting dividend shares, do their shares include rights of first refusal and even inheritance of their assets and stake in the case of any
