Seed stage (Seed-Phase)

In practice

The decisions made at the seed stage are the ones that are most expensive to correct later. Without vesting, anyone who co-founded the company keeps their shareholding even if they stopped working for it long ago. Rights to code, the trade mark and the domain that are held in the name of individual founders must be transferred to the company, or the company must be granted rights of use. Otherwise they will be missing in the due diligence. The typical instrument at this stage is the convertible loan. It avoids the valuation discussion, but converts into shares in the next round at a discount or subject to a valuation cap, and that affects the founders directly. With public funding, it must always be checked whether work on the funded project may begin before the grant has been approved. Otherwise, the funding can be lost.