Shareholders agreement cost range?

[Mick Liubinskas]

I'm looking for a range of costs that you would expect to pay for a
shareholders agreement?

Any rough guides?

[David Banes]

We did our own;

- Spreadsheet with the agreed % ownership/value
- Witnessed by a third party.

Cost us nothing and has served us well even when marching non
productive co-owners out the door.

If you REALLY want to pay someone then a couple of grand should do it
to get a standard agreement in place.

Basically, if you don't trust the people you're going into business
with to do the right thing if you have 'issues', don't go into
business with them.

David.

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[David Jones]

no doubt Dave's approach is preferable at an early stage - handshake might be OK but if the company has huge prospects, then getting it tight and right will constrain any squirrelly behaviour later on - or at least enshrine it earlier :)

1. It depends on the investor type, number of share classes, vetos, majorities, supermajorities etc. If the investors are institutional they will be seeking to make sure the investment is well protected and that means:
a) top-end of town lawyers
b) more billable hours for (a)

2. Then it depends on how well you locked down the term sheet. If there is argy-bargy, then do this at term sheet time otherwise the lawyers in (a) love dreaming up fantasy scenarios to further their quest for (b).

Lastly, most institutional investors expect the company to pay their legal costs if the deal consumates, so you should aim to cap that.

So, for an aussie company with a simple investor group $5-30K.