Venture Capital Investments

The venture capital (startup) ecosystem has been growing rapidly in Turkey in recent years, as it has all over the world, and startups and entrepreneurs emerging with innovative ideas can attract the attention of domestic and foreign investors and receive considerable investments. These investments, called “venture capital” in the investment world, carry a severe risk. This riskiness may bring significant gains but also entails the risk of the investment failing altogether.  

Venture capital investments are a technical and regulated field. Although it is possible to invest in individual startups, the venture capital ecosystem’s main actors on the investment side are Venture Capital Investment Trusts (VCITs), Venture Capital Investment Funds (VCIFs), crowdfunding, angel investor networks, and angel investors. These actors are in an advantageous position compared to individual investors due to the incentives offered to them by the state.  

On the investee side of venture capital investments are venture capital companies, i.e., startups. The Capital Markets Board of Turkey defines a venture capital company as “a company with development potential and a need for resources.” The actors mentioned above, with the expectation of a high level of return and by taking a high level of risk, invest in these companies needing resources. 

Since venture capital investments are highly risky investments, the meticulous preparation and execution of the transactions and agreements to be made during the investment processes are of great importance for both parties to the investment. In such investments, the party that will provide the investment expects serious privileges and commitments from the startup that will receive the investment, while the startup partners who will receive the investment try to protect their rights in the company. In order for the venture capital investment to be realized in a way that makes both parties happy, it is of great importance for the parties to work with a startup lawyer who has a good command of the startup ecosystem. 

Within the scope of its services as a startup lawyer, our law firm prepares and follows up on the legal processes that startups and investors need with the holistic legal services it provides before, during, and after the investment. 

Some Services We Provide in the Field of Venture Capital Investments: 

• Establishment of a company and partnership structure, 
• Preparation, negotiation, and revision of shareholders’ agreements (SHA) and share transfer agreements (SPA), 
• Managing the processes of obtaining investment and negotiating with investors, 
• Providing legal due diligence services in investment processes, 
• Designing the stock option structure and carrying out the preparation, negotiation, and revision processes of the contracts, 
• Preparation of convertible notes,  
• Execution of company general assembly processes, 
• Oral and written general legal advice, 
• Management of the recruitment process and labor law consultancy, 
• Commercial, obligations and contracts law consultancy, 
• Execution of trademark, patent, and utility model registration processes and general intellectual property law consultancy.