Supervision And Control Of Minority Shareholders

Introduction

Young startup companies wishing to raise funds in their initial stages contact, among others, professional investment funds. In most cases, in the framework of these investments, such investment funds become minority shareholders in the portfolio company, while requesting to receive effective rights to supervise and even to dominant the company's conduct – again, despite them having a minority holding in the company.

In this article herein we will attempt to briefly discuss the process above, while understanding the difficulties involved in fundraising on the one hand, and recognizing the importance of formulating effective mechanisms on the other hand, through which rights of (limited) control are given to minority shareholders of a company.