Outsourcing software development is extremely common among startups. A founder may have a strong business idea but no technical co-founder, so the startup hires a freelance developer or software agency to build the first version of its mobile application, SaaS platform, marketplace, artificial intelligence product or e-commerce infrastructure. The startup pays the development fee, receives […]
Software is often one of the most valuable assets of a technology company. For many startups, SaaS businesses, fintech companies, artificial intelligence ventures and e-commerce platforms, the company’s commercial value may depend almost entirely on its source code, software architecture, algorithms, databases and related intellectual property. This creates an extremely important legal question: Who owns […]
One of the greatest concerns for early-stage entrepreneurs is that someone may copy their startup idea after hearing a pitch, reviewing a business plan or participating in product-development discussions. The risk may arise in many different relationships. An entrepreneur may present a business model to a potential investor and later discover that a similar company […]
Angel investment can be one of the most valuable sources of financing for an early-stage startup. Unlike traditional bank financing, an angel investor may be willing to invest in a company that has limited revenue, no substantial physical assets and an uncertain financial history. In many cases, the investor is investing primarily in the founders, […]
Early-stage startups frequently need external financing before they are ready to negotiate a full equity investment round. At the pre-seed or seed stage, determining the exact valuation of a company can be difficult. The startup may have developed a promising product but may not yet have significant revenue, audited financial statements or sufficient market data […]
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 […]
One of the most common concerns among startup founders is whether an investor who initially enters the company as a minority shareholder can later begin controlling or interfering with the management of the startup. A founder may initially think of the transaction in simple terms: “The investor will provide capital, receive 15% or 20% of […]
Receiving investment is one of the most important turning points in the lifecycle of a startup. A successful financing round can provide the capital required to develop technology, recruit employees, expand into new markets, acquire customers and transform an early-stage business into a scalable company. However, investment is not simply a transfer of money from […]
Equity dilution is one of the most important issues that startup founders must understand before accepting an investment. A founder may begin with 50%, 70% or even 100% ownership of a company, but that percentage can decrease substantially after angel investment, seed financing, venture capital rounds, employee equity plans and subsequent capital increases. This process […]
Bringing a new investor into a startup can be one of the most important milestones in the life of a company. Investment can provide the capital required to hire employees, develop technology, enter new markets, increase marketing expenditure and accelerate growth. However, receiving investment also changes the ownership structure of the startup. When new shares […]