Larger cap tables

Austria, Poland and Hungary

In addition to understanding how your key investors will view a potential deal if you have a larger cap table and/or a long tail of smaller shareholders, consider the content and timing of communications with that wider audience. It will be key to find the right balance of maintaining confidentiality around the sale process and keeping shareholders in the loop to avoid bottlenecks later in the process. In particular:

• check that the contact information you are holding for shareholders is up to date (including e-mail addresses for any documents to be sent for signature via DocuSign or another type of electronic signature)
• consider how smaller shareholders will be engaged in the sales process (e.g., are powers of attorney appropriate so that you or members of the management team can sign documents on their behalf)
• consider how best to deal with any potentially hostile shareholders (e.g., disgruntled former employees). Is there the ability to drag any dissenting or non-responsive shareholder, and if so, is your drag-along mechanism fit for purpose for the type of deal you are anticipating