Startup valuation and the legal transfer of company shares are closely connected, but they are not the same concept. This distinction is particularly important for founders, investors and entrepreneurs conducting investment transactions in Turkey.

A startup may be valued at EUR 5 million, EUR 20 million or EUR 100 million. However, that valuation does not automatically determine how shares are legally transferred, whether corporate approvals are required, whether existing shareholders have contractual rights over the transaction or whether the purchaser legally becomes a shareholder.

Similarly, the nominal value of a share appearing in the company’s corporate records does not necessarily represent the commercial value of that share.

This distinction frequently causes confusion in startup transactions.

A founder may say:

“The company is valued at EUR 10 million, so my 20% shareholding is worth EUR 2 million.”

From a basic economic perspective, this calculation may appear correct.

However, legally and commercially, several additional questions must be answered:

• Is the EUR 10 million valuation pre-money or post-money?
• Is the founder selling existing shares or is the company issuing new shares?
• Does the 20% interest carry ordinary or privileged rights?
• Is there a minority discount?
• Does the investor receive liquidation preference?
• Are there transfer restrictions?
• Is there a right of first refusal?
• Do other shareholders have pre-emption or contractual purchase rights?
• Is the company an A.Ş. or Ltd. Şti.?
• Are the relevant corporate approvals available?
• Is the purchase price fixed or subject to adjustment?
• Does the valuation include future performance assumptions?
• What happens if the investor discovers undisclosed liabilities after closing?

These questions demonstrate why startup valuation and share transfer under Turkish law should always be analysed together.

This article explains the relationship between startup valuation and the legal transfer of shares in Turkey, with particular emphasis on startup investment rounds, founder share sales, venture capital transactions, joint stock companies and limited liability companies.

What Is Startup Valuation?

Startup valuation is the process of determining the economic value of a startup.

Unlike traditional companies with substantial physical assets, established profits and long operating histories, early-stage startups may have limited revenue or may not yet be profitable.

Their value may instead depend heavily on factors such as:

• technology,
• source code,
• intellectual property,
• customer growth,
• recurring revenue,
• market size,
• scalability,
• founding team,
• business model,
• user numbers,
• strategic partnerships,
• patents,
• artificial intelligence models,
• expected future revenue,
• and investment potential.

For this reason, startup valuation is often more subjective than the valuation of a mature company.

A technology startup generating relatively little current profit may still receive a very high valuation because investors expect rapid future growth.

Valuation Does Not Equal Registered Share Capital

One of the most important distinctions under Turkish corporate law is the difference between:

registered share capital

and

enterprise valuation.

Suppose a Turkish A.Ş. has registered share capital of TRY 1,000,000.

This does not mean the company is commercially worth TRY 1,000,000.

The startup might have:

• proprietary software,
• hundreds of thousands of users,
• major corporate customers,
• international investors,
• valuable trademarks,
• strong recurring revenue,
• and substantial growth potential.

The company could therefore have a negotiated market valuation of EUR 20 million even though its registered capital is only a fraction of that figure.

Likewise, a startup with significant registered capital could theoretically have a much lower market value if the business performs poorly.

Accordingly:

Nominal share value is not the same as the commercial sale value of the shares.

This is fundamental when negotiating a startup share transfer.

Example: Nominal Value vs Commercial Share Value

Consider a startup with:

Registered capital: TRY 1,000,000.

Founder A owns: 40%.

The nominal value of Founder A’s capital participation is therefore TRY 400,000.

However, investors value the entire startup at EUR 10 million.

Economically, a simple 40% calculation would suggest:

Founder A’s shares = EUR 4 million.

That does not mean the shares must legally be sold for TRY 400,000.

Nor does it necessarily mean they will actually sell for exactly EUR 4 million.

The final price may depend on:

• minority or control characteristics,
• investor rights,
• restrictions on transfer,
• liquidation preference,
• warranties,
• liabilities,
• debt,
• cash,
• performance targets,
• and negotiation between the parties.

The nominal value remains relevant to the corporate capital structure, while the commercial transfer price is determined through the transaction.

How Is Startup Valuation Usually Determined?

There is no single mandatory valuation methodology applicable to every startup transaction.

Different investors may value the same company differently.

Common approaches include:

Revenue Multiples

A SaaS startup may be valued based on annual recurring revenue or another revenue metric multiplied by a negotiated market multiple.

EBITDA Multiples

More mature startups may be valued by reference to earnings before interest, taxes, depreciation and amortisation.

Discounted Cash Flow

Expected future cash flows may be estimated and discounted to present value.

Comparable Company Analysis

The startup may be compared with similar companies or recent transactions in the same industry.

Previous Investment Round

The valuation established during the latest investment round may provide a reference point.

Strategic Value

A strategic buyer may pay more than a financial investor because the startup provides technology, customers, data, intellectual property or market access that is particularly valuable to the buyer.

The valuation method is therefore commercially important, but the legal mechanics of the transfer must still be implemented separately.

Pre-Money Valuation and Post-Money Valuation

The distinction between pre-money valuation and post-money valuation is essential in startup investment transactions.

Assume:

Pre-money valuation: EUR 8 million.

New investment: EUR 2 million.

Post-money valuation: EUR 10 million.

The investor therefore acquires:

EUR 2 million / EUR 10 million = 20%.

Existing shareholders collectively retain 80%.

If the parties instead agree that EUR 8 million is the post-money valuation, the same EUR 2 million investment represents 25%.

This distinction directly affects how many new shares must be issued and the extent to which existing founders are diluted.

A startup investment agreement should therefore clearly state:

• pre-money valuation,
• investment amount,
• post-money valuation,
• number of newly issued shares,
• price per share,
• and post-closing ownership percentages.

Startup Valuation and Price Per Share

Once the parties agree on the valuation, the investment documents usually translate that valuation into a share price.

Suppose the startup’s pre-money valuation is EUR 9 million.

The company has 900,000 existing shares on the agreed basis.

The implied price per share may therefore be:

EUR 9 million / 900,000 = EUR 10 per share.

If the investor invests EUR 1 million, the transaction may require the issuance of an economically corresponding number of new shares, subject to the Turkish corporate capital structure and the documentation adopted for the transaction.

However, the calculation may become more complicated when the company has:

• employee options,
• convertible instruments,
• different share classes,
• outstanding rights to receive equity,
• or other dilution mechanisms.

For this reason, professional investment transactions should use a detailed cap table.

Primary Investment and Share Transfer Are Legally Different

The relationship between valuation and share ownership becomes clearer when distinguishing a primary investment from a secondary share sale.

Primary Investment

The company issues new shares.

The investor pays money to the company.

The founders usually become diluted.

Secondary Share Transfer

The investor purchases existing shares from one or more existing shareholders.

The purchase price is paid to the selling shareholder.

The company does not normally receive the sale proceeds.

This distinction is extremely important.

Suppose a startup is valued at EUR 10 million.

An investor agrees to invest EUR 2 million.

If the transaction is a primary investment based on a EUR 10 million pre-money valuation, the company receives the new funds and existing shareholders are diluted.

If instead the investor purchases EUR 2 million worth of existing founder shares, the money goes to the founder and there may be no new shares created at all.

Many larger startup financing rounds combine both mechanisms.

Example of Primary and Secondary Investment

Suppose Founder A and Founder B each own 50%.

The startup is valued at EUR 8 million pre-money.

Investor C agrees to provide EUR 2 million in total.

The parties agree that:

EUR 1.5 million will be invested into the company.

EUR 500,000 will be paid to Founder A for part of Founder A’s existing shares.

The transaction therefore has two components.

The EUR 1.5 million primary investment causes dilution because new equity is issued.

The EUR 500,000 secondary transaction changes ownership because Founder A transfers existing shares.

These two transactions must be documented separately or clearly distinguished within the transaction documents.

Does a Startup Valuation Automatically Create a Right to Sell Shares at That Price?

No.

A valuation is generally an economic assessment or negotiated transaction parameter.

It does not necessarily create a legal obligation requiring another shareholder, the company or an investor to purchase shares at that valuation.

Suppose the last investment round valued a startup at EUR 20 million.

Six months later, a founder wants to sell 10%.

The founder may say:

“My 10% is therefore worth EUR 2 million.”

However, there may be no buyer willing to pay EUR 2 million.

The startup may also have experienced:

• declining revenue,
• loss of a major customer,
• regulatory problems,
• litigation,
• founder disputes,
• or deterioration in market conditions.

The last investment valuation is therefore an important reference point, but it is not necessarily a guaranteed sale price.

Minority Shares May Have a Different Economic Value

A simple mathematical calculation may not always reflect actual transaction value.

Suppose the company is worth EUR 10 million.

A 10% interest mathematically corresponds to EUR 1 million.

However, a purchaser may argue that the 10% interest:

• does not provide control,
• does not provide a board seat,
• cannot force dividends,
• is subject to transfer restrictions,
• and cannot independently determine an exit.

The purchaser may therefore seek a minority discount.

Conversely, a 51% or 60% shareholding may command a control premium because the purchaser obtains substantial influence over the company.

Startup valuation should therefore consider not only the percentage of equity but also the rights attached to the relevant shares.

Share Classes Can Affect Valuation

Two shareholders may each own 20% but have economically different rights.

For example:

Founder shares may have ordinary economic rights.

Investor shares may have:

• liquidation preference,
• anti-dilution protection,
• privileged dividends,
• board nomination rights,
• or enhanced voting rights.

Consequently, saying that two shareholders each own 20% does not necessarily mean the two interests have identical economic value.

This becomes particularly important during:

• exit transactions,
• founder buyouts,
• investment disputes,
• and secondary share sales.

The share rights must be reviewed together with the headline percentage.

Liquidation Preference Can Change the Real Value of Founder Shares

Consider:

Investor owns 20%.

Founders own 80%.

The startup is sold for EUR 5 million.

One might assume that founders receive EUR 4 million and the investor receives EUR 1 million.

However, suppose the investor previously invested EUR 2 million and has a contractual liquidation preference.

Depending on the specific structure, the investor may have priority over part of the sale proceeds.

The founders’ effective economic return may therefore be significantly below the amount suggested by their 80% ownership.

For this reason, startup valuation and exit valuation should always consider the investor waterfall.

Legal Transfer of Shares in a Turkish A.Ş.

The legal transfer process depends significantly on the type of company.

For a Turkish joint stock company, Article 490 of the Turkish Commercial Code provides the general principle that registered shares may be freely transferred unless the law or articles of association provide otherwise. Where a registered share certificate exists, a legal transfer may be effected through endorsement and transfer of possession in accordance with the statutory framework.

However, this does not mean that every A.Ş. share can always be transferred without restrictions.

The following issues should be checked:

• whether the shares are fully paid;
• whether the articles of association contain transfer restrictions;
• whether company approval is required;
• whether contractual rights of first refusal exist;
• whether investor consent is required;
• and whether the shares are represented by registered or bearer share certificates.

Restrictions on Registered Share Transfers in an A.Ş.

The articles of association may provide that registered shares can be transferred only with company approval.

For non-listed registered shares, Article 493 permits the company, under specified circumstances, to reject approval based on an important reason contained in the articles or by offering to acquire the shares for itself, another shareholder or a third party at their real value at the time of the request.

This rule creates a direct connection between valuation and share-transfer law.

In certain disputes, determining the “real value” of the shares becomes legally important rather than merely commercially convenient.

Article 493 also permits the acquirer to request determination of the real value by the commercial court at the company’s registered office in the circumstances specified by the law.

Therefore, valuation can become part of the legal transfer mechanism itself.

Share Ledger Registration in an A.Ş.

For unrepresented shares and registered share certificates, Article 499 regulates registration in the company’s share ledger.

The company records shareholders and usufruct holders in the share ledger, and a transferee cannot be entered unless proper transfer is demonstrated. In the company’s internal relationship, the person registered in the share ledger is recognised as the shareholder under the statutory framework.

Accordingly, completing a share purchase agreement alone should not be treated as the end of the corporate process.

The transaction closing checklist should also address the relevant corporate records and approvals.

Bearer Shares Require Separate Attention

Turkish A.Ş.s may also have bearer share certificates where legally available.

Article 489 provides that bearer share certificates are transferred through transfer of possession, while the current legal framework also contains requirements concerning notification and records involving the Central Securities Depository for the exercise of rights against the company and third parties.

Therefore, a startup with bearer share certificates requires a different transfer checklist from one with registered shares.

Founders should identify the share form before negotiating closing mechanics.

Legal Transfer of Shares in a Turkish Ltd. Şti.

The transfer process is more formal in a Turkish limited liability company.

Article 595 of the Turkish Commercial Code provides that the transfer of a limited company capital interest and transactions creating an obligation to transfer must be made in writing and the parties’ signatures must be notarised.

Unless the company agreement provides otherwise, general assembly approval is also required, and the transfer becomes valid with that approval.

The same provision also allows the company agreement to restrict or even prohibit transfers, subject to the relevant statutory protections.

This means that a EUR 50 million startup valuation does not eliminate formal share-transfer requirements.

Even where the buyer and seller agree on price, the transfer must still comply with applicable corporate law.

Why A.Ş. Is Often Preferred in Investment-Oriented Startups

The differences in share transfer rules help explain why investment-oriented startups frequently prefer the A.Ş. structure.

Startups expecting:

• several investment rounds,
• angel investors,
• venture capital funds,
• founder secondary sales,
• strategic investors,
• employee equity,
• and eventual exits

usually need ownership structures capable of accommodating changing shareholders.

An Ltd. Şti. can certainly receive investment, but its transfer formalities may become less convenient where ownership changes frequently.

The appropriate company type should therefore be considered together with the startup’s long-term financing strategy.

Valuation Does Not Override Transfer Restrictions in a Shareholders’ Agreement

Startup founders sometimes focus so heavily on valuation that they overlook contractual transfer restrictions.

Suppose Founder A receives an offer to sell shares at a EUR 15 million company valuation.

Founder A may believe that accepting the offer is purely a commercial decision.

However, the shareholders’ agreement may contain:

• right of first refusal,
• pre-emption rights,
• founder lock-up,
• investor consent,
• tag-along rights,
• drag-along rights,
• permitted transfer rules,
• or prohibitions on transferring shares to competitors.

The offer price may therefore be attractive, but Founder A may not be contractually free to complete the transaction immediately.

This is why a share transfer requires both:

valuation analysis

and

legal transfer analysis.

Right of First Refusal and Valuation

A right of first refusal can directly affect the price and transfer process.

Suppose a third-party investor offers Founder A EUR 2 million for shares.

The shareholders’ agreement may require Founder A first to offer the same shares to existing shareholders on equivalent terms.

The third-party offer effectively establishes the proposed transfer valuation.

Existing shareholders then decide whether to match it.

Disputes may arise over whether the offers are truly equivalent, particularly where the external offer includes:

• deferred payments,
• earn-outs,
• non-cash consideration,
• consulting arrangements,
• or additional commercial benefits.

A sophisticated ROFR clause should therefore define how non-cash or contingent consideration is valued.

Tag-Along Rights and Share Valuation

Tag-along rights also connect valuation with legal transfer.

Suppose Founder A owns 70%.

Investor B owns 30%.

A buyer offers to purchase Founder A’s controlling stake at a premium.

Investor B may have a tag-along right permitting participation in the transaction.

The agreement should clarify whether Investor B receives:

• the same price per share,
• the same economic terms,
• and equivalent consideration.

Without precise drafting, disagreements may arise concerning whether the controlling founder is receiving additional benefits outside the nominal share price.

Drag-Along Rights and Minimum Valuation

Drag-along provisions can also contain valuation protections.

For example, the shareholders’ agreement might permit a drag only where:

• shareholders representing at least 75% approve the transaction;
• the buyer is independent;
• all shareholders receive equivalent economic treatment;
• and the company valuation exceeds a specified minimum.

A minimum valuation threshold may protect founders from being forced into an early sale at an unattractive price.

However, a fixed threshold can become outdated as the startup grows.

For this reason, some agreements use formulas rather than fixed amounts.

Capital Increase Valuation and Existing Shareholders

Startup valuation is especially important during capital increases.

Suppose a company valued at EUR 20 million issues new shares at a price implying only a EUR 5 million valuation.

Existing shareholders may suffer substantial dilution.

Whether such a transaction is lawful depends on the circumstances, corporate approvals and shareholder rights.

For A.Ş.s, Article 461 provides shareholders with proportional rights to acquire newly issued shares and permits restriction or removal of those rights only under specified conditions. The law also prohibits unjustifiable advantage or disadvantage through restriction of pre-emption rights.

Limited company shareholders benefit from a corresponding statutory framework under Article 591, subject to the company agreement and statutory conditions.

The valuation used during a financing round may therefore become relevant in disputes over whether minority shareholders were unfairly diluted.

Can a Startup Issue Shares Above Nominal Value?

The commercial value of startup shares can substantially exceed their nominal value.

This is common in investment rounds.

An investor paying a price based on a multi-million-euro startup valuation is not necessarily acquiring shares merely at their nominal corporate value.

Investment structures may therefore use share premiums and related corporate mechanisms where legally appropriate.

The documentation should clearly distinguish:

• nominal capital amount,
• premium,
• total investment amount,
• and ownership percentage.

This is particularly important for accounting, corporate and tax implementation.

Startup Valuation Before a Founder Secondary Sale

A founder secondary sale should be approached differently from a financing round.

The investor purchasing founder shares should examine:

• current company valuation,
• latest investment round,
• financial performance,
• share rights,
• transfer restrictions,
• founder vesting,
• company liabilities,
• and likelihood of future dilution.

The founder should also determine whether selling shares changes:

• board rights,
• veto rights,
• founder status,
• vesting,
• drag-along thresholds,
• or control of the company.

A sale that appears financially attractive may cause the founder to fall below an important governance threshold.

Example: Founder Loses Control Through a Secondary Sale

Founder A owns 52%.

Other investors own 48%.

Founder A sells 10% of the company at a very attractive valuation.

After closing:

Founder A: 42%.

Other shareholders: 58%.

The founder has obtained liquidity but no longer holds an absolute majority.

If governance documents have not preserved founder rights, the commercial consequence may be much greater than simply reducing ownership by ten percentage points.

Therefore, a founder should evaluate both:

the price received today

and

the rights lost after the transfer.

Due Diligence Can Change the Agreed Valuation

Startup valuation is often negotiated before full legal due diligence is completed.

The investor may initially agree to a EUR 15 million valuation.

During due diligence, however, the investor discovers:

• intellectual property is not owned by the company;
• major customer contracts can be terminated immediately;
• tax liabilities exist;
• employment disputes are pending;
• source code contains problematic third-party components;
• data protection compliance is inadequate;
• or a founder owns a key trademark personally.

The investor may then demand:

• a lower valuation,
• additional warranties,
• indemnification,
• escrow,
• holdback,
• or conditions precedent.

Therefore, the valuation stated in a term sheet is not always identical to the final transaction economics.

Enterprise Value vs Equity Value

Professional startup transactions should also distinguish enterprise value from equity value.

Very broadly:

Enterprise value reflects the value of the operating business.

Equity value reflects the amount attributable to shareholders after relevant adjustments.

The exact calculation may consider:

• cash,
• debt,
• shareholder loans,
• transaction expenses,
• and working-capital adjustments.

Suppose a startup has an enterprise value of EUR 10 million but also has EUR 3 million of debt.

It does not necessarily follow that shareholders collectively receive EUR 10 million.

The share purchase agreement should therefore identify what the headline valuation actually represents.

Debt-Free/Cash-Free Transactions

Acquisition transactions may be negotiated on a debt-free, cash-free basis.

The buyer may agree on an enterprise valuation and then adjust the final equity purchase price for:

• debt,
• cash,
• debt-like items,
• and sometimes working capital.

This can materially change the amount founders ultimately receive.

For example:

Enterprise value: EUR 20 million.

Debt: EUR 4 million.

Cash: EUR 1 million.

Simplified equity value:

EUR 17 million.

The actual share purchase price may therefore be very different from the headline enterprise valuation announced during negotiations.

Locked-Box and Completion Accounts

More sophisticated startup acquisitions may use mechanisms such as:

• locked-box pricing,
• completion accounts,
• purchase-price adjustments.

Under a locked-box structure, the price may be based on financial statements at a specified historical date with protections against inappropriate value leakage.

Under completion accounts, the final purchase price may be adjusted after closing based on actual financial figures.

These mechanisms demonstrate again that valuation and final share price are not always identical.

Earn-Outs in Startup Share Transfers

An earn-out can be used where buyer and seller disagree about startup valuation.

Suppose the founder believes the company is worth EUR 20 million.

The buyer believes it is worth EUR 12 million.

The parties could potentially agree:

EUR 12 million payable at closing.

Up to an additional EUR 8 million payable if specified performance targets are achieved.

The earn-out may depend on:

• revenue,
• EBITDA,
• customer numbers,
• product launch,
• regulatory approval,
• or another agreed metric.

Earn-outs can bridge valuation gaps, but they can also create disputes.

The contract should clearly define:

• performance metrics,
• measurement period,
• accounting principles,
• operational control,
• information rights,
• and circumstances preventing manipulation of the earn-out.

Intellectual Property Can Be the Main Driver of Startup Valuation

Technology startups are often valued primarily because of intangible assets.

These may include:

• source code,
• patents,
• algorithms,
• artificial intelligence models,
• trademarks,
• databases,
• domain names,
• designs,
• trade secrets,
• and proprietary technology.

If these assets do not legally belong to the company, the valuation may be fundamentally misleading.

Consider a startup valued at EUR 15 million largely because of proprietary software.

During legal due diligence, the investor discovers that the software is still owned personally by a former founder.

The investor may refuse to close.

Therefore, legal ownership of startup assets must support the commercial valuation.

Founder Vesting Can Affect the Value of Shares

Founder vesting can also affect transferability and value.

Suppose Founder A legally holds 30%, but a portion remains subject to reverse vesting and call-option rights.

The founder may not be able to sell the entire 30% freely.

A purchaser must examine:

• vested portion,
• unvested portion,
• founder transfer restrictions,
• leaver provisions,
• and consent requirements.

Accordingly, cap-table percentage alone is not sufficient to determine transferable value.

Tax Considerations Should Be Reviewed Separately

The agreed commercial valuation and sale price may also have tax consequences.

The tax treatment can depend on factors including:

• seller identity,
• company type,
• nature of the shares,
• holding period,
• acquisition cost,
• transaction structure,
• and whether the seller is an individual or corporate entity.

Tax legislation can change, and international transactions may raise additional issues involving tax treaties and cross-border payments.

For this reason, legal share-transfer planning should be coordinated with current tax advice before signing and closing.

A valuation should not be selected artificially only to obtain a preferred tax result without examining legal and fiscal consequences.

Can the Parties Sell Shares Below the Last Investment Valuation?

Commercially, a shareholder may sometimes agree to sell at a price below the latest financing valuation.

This could happen because:

• the shareholder needs liquidity;
• the stake is small and illiquid;
• the company’s performance has deteriorated;
• the shares are subject to restrictions;
• or the buyer obtains only a minority interest.

However, parties should consider whether the transaction affects:

• investor rights,
• right-of-first-refusal mechanisms,
• anti-dilution arrangements,
• tax issues,
• related-party transaction concerns,
• and future financing negotiations.

A low-priced secondary transaction can also create difficult discussions with future investors concerning the company’s implied valuation.

Can Shares Be Sold Above the Last Investment Valuation?

Yes, if a purchaser is willing to pay a higher amount.

A strategic investor may value the shares more highly than the latest financial investor because of:

• technology synergies,
• customer access,
• strategic market position,
• acquisition of talent,
• data,
• or elimination of competition.

Therefore, startup valuation is not an immutable legal number.

Different transactions can produce different valuations.

Valuation Clauses in Shareholders’ Agreements

Founders should consider including valuation mechanisms in their shareholders’ agreement before disputes arise.

These can become relevant for:

• founder exit,
• death,
• disability,
• good leaver situations,
• bad leaver situations,
• call options,
• put options,
• deadlock,
• compulsory transfers,
• and company buyouts.

Possible mechanisms include:

• fair market value,
• most recent financing valuation,
• independent expert valuation,
• agreed formula,
• EBITDA multiple,
• revenue multiple,
• or a combination.

The agreement should also state who appoints the valuer and what happens if the parties disagree.

“Fair Market Value” Should Not Be Left Undefined

Using the expression “fair market value” may appear sufficient, but disputes can still arise.

Questions include:

• Is a minority discount applied?
• Is a control premium applied?
• Are investor preferences taken into account?
• Is the company valued as a going concern?
• Is the latest investment round relevant?
• Are future projections included?
• Is debt deducted?
• What is the valuation date?

The more valuable the startup becomes, the more significant these questions become.

A good shareholders’ agreement should provide a workable valuation procedure.

Startup Share Transfer Agreement

A professional startup share transfer should normally be documented through an appropriate share purchase or share transfer agreement.

Depending on the transaction, the agreement may address:

• seller and purchaser,
• shares being transferred,
• purchase price,
• valuation basis,
• payment conditions,
• closing date,
• corporate approvals,
• conditions precedent,
• representations and warranties,
• intellectual property,
• tax matters,
• liabilities,
• restrictive covenants,
• confidentiality,
• non-compete obligations,
• post-closing cooperation,
• indemnification,
• and dispute resolution.

For an Ltd. Şti., mandatory statutory form requirements must additionally be satisfied.

For an A.Ş., the precise mechanics depend on the nature of the shares and applicable restrictions.

Startup Valuation and Share Transfer Checklist

Before completing a startup share transfer in Turkey, founders and investors should consider at least the following questions:

1. What is the agreed company valuation?
2. Is it pre-money or post-money?
3. Is it enterprise value or equity value?
4. What is the nominal value of the shares?
5. What is the commercial transfer price?
6. Is the transaction primary or secondary?
7. What percentage is being transferred?
8. What rights attach to the shares?
9. Are the shares vested?
10. Are there privileged rights?
11. Is there liquidation preference?
12. Are there transfer restrictions?
13. Is there a right of first refusal?
14. Are tag-along rights triggered?
15. Are drag-along rights triggered?
16. Is investor consent required?
17. Does the articles of association restrict the transfer?
18. Is the company an A.Ş. or Ltd. Şti.?
19. What statutory formalities apply?
20. Is general assembly approval required?
21. Is share-ledger registration required?
22. Are share certificates involved?
23. Are bearer-share notification requirements relevant?
24. Have all intellectual property rights been verified?
25. Has legal and financial due diligence been completed?
26. Are there undisclosed liabilities?
27. Is the price subject to adjustment?
28. Is an earn-out involved?
29. What tax consequences arise?
30. What rights will the seller retain after closing?

If these questions are not answered before closing, the parties may understand the valuation but still fail to understand the transaction.

Conclusion: How Are Startup Valuation and Legal Share Transfer Connected?

Startup valuation and legal transfer of company shares are closely related, but they perform different functions.

Valuation answers the economic question:

“How much is the startup or the relevant equity interest worth?”

Share-transfer law answers the legal question:

“How does ownership of those shares validly move from one person to another?”

A startup may be valued at EUR 50 million, but the company’s registered capital may be only a small fraction of that figure.

A founder may own shares with a nominal value of TRY 500,000 that have a commercial value of several million euros.

There is nothing inherently contradictory about this.

The nominal value belongs to the corporate capital structure.

The commercial value reflects what investors or purchasers are prepared to pay for the economic and governance rights attached to the shares.

However, agreeing on price does not itself complete the transfer.

For a Turkish Ltd. Şti., Article 595 of the Turkish Commercial Code requires the capital-interest transfer agreement and the transaction creating the transfer obligation to be made in writing with notarised signatures, while general assembly approval is ordinarily required unless the company agreement provides otherwise.

For an A.Ş., Article 490 establishes the general transferability principle for registered shares, while Articles 491–494 regulate statutory and articles-based restrictions. In specific non-listed registered-share situations, Article 493 expressly introduces the concept of the share’s real value into the legal transfer process.

This illustrates the central relationship between valuation and company law.

Valuation can influence:

• the price per share,
• investor percentage,
• founder dilution,
• capital increase structure,
• minority or control premiums,
• founder secondary sales,
• compulsory transfers,
• option exercises,
• and exit proceeds.

But legal ownership ultimately depends on compliance with the applicable corporate and contractual transfer rules.

For founders, perhaps the most important mistake to avoid is assuming:

“My startup is worth EUR 20 million, therefore my 25% can automatically be sold for EUR 5 million.”

The correct analysis is more detailed.

Founders should ask:

What rights are attached to my 25%?

Is the valuation enterprise value or equity value?

Is there debt?

Are there investor liquidation preferences?

Am I selling a controlling or minority stake?

Can I legally transfer the shares without consent?

Does another shareholder have a right of first refusal?

Is my equity subject to vesting?

Will the sale cause me to lose board or veto rights?

What legal formalities must be completed before the purchaser becomes a shareholder?

Similarly, investors should not rely solely on headline valuation.

They should verify:

• ownership,
• cap table,
• corporate records,
• intellectual property,
• transferability,
• share privileges,
• liabilities,
• existing shareholder rights,
• and the legal validity of the proposed transaction.

A startup share transaction is therefore not merely a mathematical exercise.

It combines valuation, corporate law, contract law, taxation, due diligence and transaction structuring.

When these areas are analysed together, the parties can ensure that the economic agreement reflected in the valuation is correctly translated into legally effective ownership.

For startups in Turkey, this becomes increasingly important as the company progresses from founder ownership to angel investment, venture capital financing, secondary transactions and eventual exit.

The higher the startup valuation becomes, the more important it is that the legal ownership structure behind that valuation is clear, enforceable and properly documented.