Financing in the Valley and Europe – Big Differences

We keep running into clients asking what the big differences are between financing a startup in Silicon Valley and Europe. In this post we wanted to highlight a couple of these differences. Tranche You should be aware that many seed financings in Europe are structured as tranche deals. This means the VC releases money only if certain milestones or KPIs are satisfied, indicating that a seed round is essentially similar to multiple different financings. The VC exclusively determines whether the startup hit the milestone. European style tranche deals have a negative impact on company valuations and the dynamic between entrepreneur and VC. For example, tranche financing locks in previous valuations in a changing world. Practically speaking, each tranche is a…

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Capital agreements in the U.S. and Poland, treating people like people – Cytowski and Snazyk

Tytus Cytowski and Tomasz Snazyk, lawyers and founders of the law firm Cytowski LLC, which specializes in the field of venture capital / start-up in Poland and USA; talk about the differences between foreign investor financing agreements and their Polish counterparts. What are the usual differences between American and Polish venture capital agreements? Tomek Snazyk (TS): First of all, it is extremely rare for a foreign fund to invest in a company registered in Poland. Foreign investors, especially those from the U.S, prefer to invest in entities registered over there. As to the venture capital agreements themselves, apart from the things typically associated with U.S. laws that do not exist in the Polish law, the differences are small. Part of…

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