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Venture Debt for Tech Companies | 1 VC & TECH BRIEFINGS GERMANY 1 Orrick, Herrington & Sutcliffe LLP 1 Herausgeber: Published by: Orrick, Herrington & Sutcliffe LLP, Orrick, Herrington & Sutcliffe LLP, Heinrich-Heine-Allee 12, 40239 Düsseldorf, Deutschland, Heinrich-Heine-Allee 12, 40239 Düsseldorf, Germany, Tel.: +49 (0)211/367870, Internet: www.orrick.de tel.: +49 (0)211/367870, internet: www.orrick.de Vertretungsberechtigt in Deutschland und verantwortlich für Authorized representatives in Germany responsible for the editorial redaktionelle Inhalte i.S.d. § 55 Abs. 3 des Staatsvertrages für content according to § 55(3) Interstate Broadcasting and Telemedia Rundfunk und Telemedien sind Dr. Oliver Duys und Dr. Christoph Agreement (Staatsvertrag für Rundfunk und Telemedien) are Brenner (Managing Partner Deutschland), Heinrich-Heine-Allee 12, Dr. Oliver Duys and Dr. Christoph Brenner (Managing Partner 40239 Düsseldorf und Rosental 4, 80331 München Deutschland, Germany), Heinrich-Heine-Allee 12, 40239 Düsseldorf and Tel.:+49 (0)211/367870, E-Mail: [email protected] Rosental 4, 80331 Munich, Germany, tel.: +49 (0)211/367870, email: [email protected] Copyright: Copyright: Orrick, Herrington & Sutcliffe LLP, 2019. Alle Rechte vorbehalten. Orrick, Herrington & Sutcliffe LLP, 2019. All rights reserved. Das Orrick-Logo und “Orrick, Herrington & Sutcliffe LLP” sind The Orrick logo and “Orrick, Herrington & Sutcliffe LLP” are eingetragene Marken der Orrick, Herrington & Sutcliffe LLP. trademarks of Orrick, Herrington & Sutcliffe LLP. Version: Mai 2019 Version: May 2019 Haftungsausschluss: Disclaimer: Diese Publikation dient allein der allgemeinen Information und This publication is for general informational purposes only without berücksichtigt nicht die individuellen Umstände des Einzelfalls. consideration to specific facts and circumstances of individual cases Diese Publikation erhebt keinen Anspruch auf Vollständigkeit. and does not purport to be comprehensive. It is not intended as a Sie dient nicht dazu und kann keine einzelfallbezogene Beratung substitute for the advice of competent legal, tax or other advisers durch kompetente Rechts-, Steuer- und andere Berater ersetzen in connection with any particular matter or issue and should not und darf nicht entsprechend verwandt werden. Diese Publikation be used as such substitute. This publication does not constitute, stellt weder ausdrücklich noch stillschweigend ein Angebot oder either expressly or tacitly, an offer or the acceptance of an offer die Annahme eines Angebots auf Abschluss eines Auskunfts- oder to conclude an information or consultancy contract. Opinions, Beratungsvertrages dar. Die in dieser Publikation enthaltenen interpretations and predictions expressed in this publication are the Meinungen, Auslegungen und Vorhersagen geben allein die authors’ own and do not necessarily represent the views of Orrick, Ansichten der Autoren wieder, welche nicht notwendigerweise Herrington & Sutcliffe LLP. While the authors have made efforts der Ansicht der Orrick, Herrington & Sutcliffe LLP entsprechen. to be accurate in their statements contained in this publication, Auch wenn sich die Autoren um eine korrekte Darstellung in dieser neither they nor Orrick, Herrington & Sutcliffe LLP or anyone Publikation bemüht haben, übernehmen weder sie, noch die Orrick, connected to them make any representation or warranty or can be Herrington & Sutcliffe LLP noch sonst jemand in Verbindung mit den held liable in this regard. Vorgenannten Gewähr, Einstandspflicht oder Haftung hierfür. Anwaltswerbung. Attorney Advertising. Orrick, Herrington & Sutcliffe LLP Inhaltsverzeichnis Table of Contents A. Venture Debt ........................................................................................................ 6-40 I. Was ist Venture Debt? ..................................................................................................6 II. Vorteile einer Venture Debt-Finanzierung ...................................................................20 III. Nachteile und Risiken einer Venture Debt-Finanzierung .............................................24 IV. Typische Regelungen und Hinweise zur Vertragsgestaltung ......................................28 B. Unsere internationale Plattform für Technologieunternehmen ........................... 48-49 C. Die Autoren ..............................................................................................................50 A. Venture Debt ........................................................................................................ 6-40 I. What is Venture Debt? ..................................................................................................7 II. Advantages of Venture Debt Financing ...................................................................... 21 III. Disadvantages and Risks of Venture Debt Financing ..................................................25 IV. Customary Terms and Conditions and Drafting Tips ..................................................29 B. Our International Platform for Technology Companies ....................................... 48-49 C. About the Authors ...................................................................................................50 3 Die Orrick Legal Ninja Reihe Mit unseren auf Technologietransaktionen Woher das “Ninja” im Namen kommt? Vielleicht spezialisierten Teams in allen wichtigen Märkten weil einige von uns in den Neunziger Jahren einfach dieser Welt begleiten wir zahlreiche deutsche Tech- sehr viel Fernsehen geschaut haben… Im Ernst, ein Unternehmen auf ihrem Wachstumspfad. Als eine “Ninja” ist gerade im angelsächsischen Sprachraum der führenden Tech-Kanzleien weltweit fühlen wir uns zum Synonym geworden für “jemand(en), der darüber hinaus verpflichtet, die Gründerszenen in den sich in einer bestimmten Fähigkeit oder Aktivität USA und Deutschland noch stärker zu vernetzen. hervortut”. Das ist unser Anspruch, wenn wir junge Technologieunternehmen und ihre Investoren Aus diesem Grund haben wir die Orrick Legal Ninja maßgeschneidert beraten. Wir hoffen, dass unsere Reihe ins Leben gerufen. Mit dieser periodisch OLNS-Reihe Ihnen dabei hilft, „Ninja Entrepreneurs“ erscheinenden Serie wollen wir Überblicke zu zu sein. aktuellen rechtlichen Entwicklungen geben, aber auch vertieft Themen vorstellen, die für Start-ups und ihre Wir hoffen, dass Ihnen diese erste Ausgabe Investoren besonders wichtig sind. unserer Ninja Serie gefällt. Wenn Sie Anregungen haben, nehmen Sie bitte Kontakt mit uns auf, Ihre Hinter der Orrick Legal Ninja Reihe steht ein Erfahrungen interessieren uns sehr. Wir wollen multidisziplinäres Team aus unseren weltweit mehr uns kontinuierlich weiterentwickeln, um unsere als 25 Büros. Dieses hat es sich zur Aufgabe gemacht, Mandanten bestmöglich begleiten zu können. unseren großen internationalen Erfahrungsschatz im Bereich Venture Capital und Technologietransaktionen für diejenigen nutzbar zu machen, die in Deutschland Im Namen des Orrick-Teams Venture und Innovation unternehmerisch nach vorne bringen. Sven Greulich Orrick – Technology Companies Group Deutschland 4 Orrick, Herrington & Sutcliffe LLP About the Orrick Legal Ninja Series In substantially all of the major world markets, we Why “Ninja Series”? This title might simply reflect the have dedicated technology lawyers who support fact that some of us watched a little too much TV in young German technology companies on their the 1990s. But, seriously, “Ninja” has come to signify growth trajectory through all stages. As one of the “a person who excels in a particular skill or activity.” top tech law firms in the world, we are particularly That’s what the Orrick team strives to be when it committed to bringing the American and German comes to providing tailored advice to growing tech entrepreneurship ecosystems closer together. companies and their investors. We hope that the OLNS also empowers you to be Ninja entrepreneurs. For this purpose, we have launched the Orrick Legal Ninja Series. With this series we will provide overviews We hope you enjoy this first edition of our series. If on current legal trends and take deeper dives on you would like to discuss it further, please contact certain legal topics that are particularly relevant for us. We would love to learn about your experiences start-ups and their investors. This series will be co- with these topics, so please share them with us. We authored by a multidisciplinary team of attorneys from constantly strive to evolve and grow in order to best our national and international offices. It is our goal serve our clients. to tap into the rich reservoir of the venture capital and technology law know-how of our international platform and make it available to the exciting German On behalf of the Orrick Team, entrepreneurship and innovation scene. Sven Greulich Orrick—Technology Companies Group Germany 5 A. Venture Debt I. Was ist Venture Debt? 1. VENTURE DEBT KURZ ZUSAMMENGEFASST • Attraktive Finanzierung für Start-ups mit starken Bestandsinvestoren • Üblicherweise in Form eines Tilgungsdarlehens • Hohe Flexibilität und allenfalls geringe Verwässerung für Gründer • Kreditgeber kompensieren das erhöhte Ausfallrisiko durch höhere Zinsen, verschiedene Gebührenmodelle und einen Equity Kicker Eine der größten Herausforderung Allerdings ist eine solche Kurz zusammengefasst für junge Technologieunternehmen VC-Finanzierung für die ist VL ein mittelfristiges ist die Sicherung der eigenen Gründer aufgrund der dadurch Fremdkapitalinstrument, das Finanzierung. Denn reguläre eintretenden
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