Venture capital: Liquiditation preference: Practical tips for structuring share classes

The Legal Industry Reviews: Czech Republic Edition 4 (May 2024) provides an in-depth analysis of the Czech legal market. It covers trends, significant law firms, key legal professionals, and major legal developments. The edition discusses the evolving legal landscape, regulatory changes, and their implications for businesses and legal practices.

Liquidation Preference (LiqPref) clauses, which determine the payout order during a liquidity event, have rapidly become standard in Czech venture capital transactions. Typically, LiqPref rights are established under Czech corporate law as preferential rights to any company distributions, including profit shares, other capital funds, and liquidation funds following a liquidity event. In his article, expert Michal Jendzelovsky aims to highlight the key considerations for incorporating LiqPref clauses into the Articles of Association (AoAs) of a Czech company. Read the full article here.