Shareholders are individuals, companies or institutions that hold shares in a company. The English term literally means Shareholders.
In German, the term ‘shareholder’ is often used interchangeably with ‘Aktionär:innen’. Aktionär:innen hold shares in a public limited company. In the case of start-ups organised as a GmbH, however, the term usually refers to shareholders who hold shares in the company.
Typical shareholders in a start-up are:
- Founders:inside
- Business Angels
- Venture capital investors
- Corporate venture capital units
- Employees who hold shares in the company
- strategic business partners
- Family Offices
- publicly owned companies
Shareholders often provide capital to a company and receive a percentage stake in return. The exact percentage of ownership is documented, for example, in a cap table.
A simplified example:
| Shareholder | Share in the company |
| Founders:inside | 70 % |
| Business angel investors | 10 % |
| Venture capital investors | 15 % |
| Employee Share Scheme | 5 % |
The rights held by shareholders depend, amongst other things, on the legal form of the company, the partnership agreement and the relevant share class.
Typical rights of shareholders include:
- Voting rights on important corporate decisions
- Rights to information and oversight
- Share in distributed profits
- Share of the proceeds from the sale in the event of an exit
- Subscription rights for new shares in the company
- Approval of certain strategic decisions
Not all shareholders need to have the same rights. Investors can, for example, agree on specific rights of approval, information or liquidation. Shares with no voting rights, or with restricted voting rights, are also possible.
Shareholders can be more than just financial backers for start-ups. Experienced investors often provide additional support by:
- strategic knowledge
- Contacts with potential customers
- Access to further investors
- Industry knowledge
- Support with funding rounds
- Experience in setting up businesses
- Preparing for growth or an exit
At the same time, differing interests may arise amongst the shareholders. Founders may wish to grow the business in the long term, whilst investors may be looking to sell or achieve a quick return.
Typical challenges include:
- differing expectations regarding growth and exit
- Conflicts arising from strategic decisions
- increasing coordination processes
- Dilution of existing shares
- Restriction of the founders’ freedom to make decisions
- unclear roles and responsibilities
When bringing on board new investors, founders should therefore not focus solely on the amount of investment on offer. Shared goals, aligned expectations, relevant experience and good collaboration are just as important.
On the term Stakeholders A clear distinction must be made between shareholders:
| Shareholder | Stakeholders |
| hold shares in the company | are affected by the company or have an impact on it |
| have beneficial ownership rights | do not need to hold shares in the company |
| Examples: Founders and investors | Examples: staff, customers, suppliers and local authorities |
All shareholders are therefore stakeholders, but not all stakeholders are shareholders.
innoWerft helps founders to better understand ownership structures and the interests of various shareholders, to identify suitable investors, and to prepare for investment and financing discussions.