Resources
Understand the vocabulary and the context
The glossary of terms that come up in a shareholders' agreement, frequently asked questions, and where to go further.
Glossary
The essential terms, explained simply. These are not official legal definitions, just reference points to help you understand.
- Shareholders' agreement
- A contract between shareholders that organizes their relationship: governance, entry and exit, decision-making. Complements the articles of association and stays confidential.
- Vesting
- A mechanism by which a founder or employee earns their shares gradually over time, instead of holding everything from day one. Protects the company if someone leaves early.
- Cliff
- An initial period (often 1 year) during which no shares vest. If the person leaves before the end of the cliff, they leave with nothing.
- Reverse vesting
- Founders hold their shares from the start, but the company can buy them back if the founder leaves early. Similar effect to vesting, inverted mechanics.
- Good leaver / Bad leaver
- A distinction that determines what happens to the shares of someone leaving the company. A good leaver (clean departure) keeps more than a bad leaver (misconduct, early exit).
- Drag-along
- Lets majority shareholders selling the company force minority holders to sell on the same terms. Prevents a small shareholder from blocking an exit.
- Tag-along
- Lets a minority shareholder sell their shares on the same terms as a majority holder selling theirs. Protects minority shareholders.
- Pre-emption right
- The right of existing shareholders to buy, as a priority, the shares another shareholder wishes to sell, before they go to a third party.
- Liquidation preference
- An investor's right to be repaid first (often 1x their investment) when the company is sold, before founders receive anything.
- Anti-dilution
- A clause that protects an investor if the company later raises funds at a lower valuation, by reallocating shares to compensate them.
- Preferred shares
- A class of shares with special rights (repayment priority, enhanced voting rights, dividends), often allocated to investors.
- BSPCE
- A French instrument giving employees the right to buy shares later at a fixed price, with a favorable tax regime. Reserved for young companies. The French equivalent of stock options.
- ESOP / option pool
- A reserve of shares set aside to be distributed to employees (Employee Stock Option Plan). The North American equivalent of BSPCE.
- Cap table
- Capitalization table. A document listing who owns what in the company: shares, options, percentages, at each funding round.
- Dilution
- The reduction of a shareholder's ownership percentage when the company issues new shares, during a fundraise for example.
- Pre-money / Post-money
- Pre-money valuation is the company's value before a raise. Post-money is pre-money plus the amount raised. It determines the percentage given to investors.
- Term sheet
- A non-binding document summarizing the main terms of an investment before the final contracts are drafted.
- Non-compete clause
- A commitment by a founder or partner not to create or join a competing activity for a defined duration and territory, generally after they leave.
Frequently asked questions
Does Atlas replace a lawyer?
No. Atlas is an educational tool that helps you understand the clauses and prepare for your meeting. The drafting and review of the final agreement must be done by a lawyer.
How long does the questionnaire take?
About an hour for the full journey: 12 questions, discovering the relevant clauses, and building your brief. You can stop and resume later.
Is it free?
Yes, entirely free and with no account required. Atlas is a tool provided by Fractal.
Is my data safe?
Your answers are stored by Fractal so you can come back to your session and to improve the tool. You can request their deletion at any time.
What if I don't have cofounders yet?
Atlas is still useful: you understand the clauses that will structure your company, and you arrive prepared even for a future discussion with partners or investors.
What's the difference between France and Quebec?
The content adapts to the jurisdiction you choose: some clauses are specific (BSPCE in France, ESOP in Quebec), and the legal reference points differ. More jurisdictions will come based on demand.
What happens after the export?
You receive by email a PDF structured by category, ready to send to your lawyer before your meeting. It contains your selected clauses and the questions to ask.
Can I change my answers later?
Yes. The brief email contains a magic link that lets you resume your session and adjust your selection, valid for 90 days.
Who is behind Atlas?
Atlas is a project by Fractal, a fractional CFO and financial due diligence firm for tech startups in France and Quebec.
Why is Atlas free?
Because a founder who structures their agreement well is exactly the kind of person Fractal likes to work with. It's a useful tool in itself, and a way to meet us.
Go further with Fractal
Atlas is a project by Fractal. If you want to push the structuring of your company further: