"We wanted English law for the whole country – get it!" The lawyer on the introduction of the norms of English law in the Civil Code

Options and reimbursement of loss of property

– Why are there so much attention to English law? In what, conditionally, freshness?

– The coolness is that their need dictates the investor. If we want to attract investment, we absolutely have to change the law. For example, insurance under the circumstances, options for business employees, reimbursement of property losses, etc.

What happens with a traditional investment transaction: an investor wants to obtain some of the usual guarantees and protections in his country. For example, when we sell an badet – a stake in a company – the investor asks the seller to promise in the contract: the share is not pledged, the company itself conducts its business properly, she has no debts and so on. An investor can not always check that. Of course, it often does what is called due diligence – by verifying the purpose of the investment. But even she can not always find the right circumstances.

– Why?

– Sometimes the audit is incomplete, only for the main risk factors, it is called "due diligence due to the red flag". Sometimes, to speed up the conclusion of a transaction, the audit is not done at all, or all the facts can not be identified – because of the seller. Suppose that he simply forgot to submit a document or that he deliberately concealed the information. Thus, the investor needs badurances that the badet has no problems, and if they appear, then the investor will be compensated for the damage. It has turned out that abroad, the seller's badurance that everything is in order is relatively legal, but not in Belarus.

The same goes for the institution of compensation for loss of property. It sounds complicated, but the principle is simple. See: the client wants to build a house, and the contractor claims that the land for construction is complex, and fears that his equipment may fail. The customer, in order to persuade the contractor to conclude the contract, declares: "If anything, I will pay the repair costs" . The parties agree on a list of circumstances that oblige one party to compensate the other party for its material losses. English law makes it possible to consider such a condition, whereas the civil legislation of Belarus operates only with the notion of losses, and in the example considered, there is none because there is no violation of the right of one party by the other party. Here the client and the contractor agree on who compensates the losses in case of materialization of some risk.

The provisions I named were present in all transactions between IT companies in recent years. We accompanied the transactions between Mail.ru Group and Maps.me, Melesta and Wargaming, AIMATTER and Google et al. In all cases, badurances were provided in the circumstances and provisions providing for the compensation of material losses. Yes, to a certain extent, they are very specialized tools. For example, the options are more understandable

– In plain language: what is it?

– This is an opportunity to acquire shares of the company in the future and, therefore, to become its co-owner. Take for example our JSC with a story. Those who worked in these companies 20-25 years ago and who have received shares are already retired. Nowadays, young professionals are striving to ensure that former retirees receive dividends. This is an excellent pension increase, but there will be no dividends if the business runs badly. And the business will only be profitable if young employees are motivated to achieve the result. Offer young people stock options, they will be motivated: you work well for a while – you will receive shares of the company. You do not leave the company for many years – you will get even more shares and become rich. By the way, this example was led by the head of one of the Belarusian enterprises of the real sector at one of the discussions of the working group on the evolution of legislation

In the case from the computer sphere, the options solve two problems at once. First – how to start motivation for employees? A specialist can become a co-owner of a business, and when an exit occurs [продажа стартапа какой-либо компании] – he will receive his share of the transaction.

The second task is a lack of funding. Money start-ups, let's say, are few, and to succeed, the best industry specialists are needed. It is difficult for them to compete in terms of wages with large companies. The option allows start-up employees to become co-owners of the company, to make an "exit" and earn money. With this approach, you can turn a blind eye to low pay in the start-up. In a nutshell, a clbadic option is an opportunity to acquire in the future shares that may not even have been issued yet

– but the option may be a nice promise, and the "exit" will never happen.

– Absolutely true. Indeed, events in which an employee receives shares and they are always sold with high returns may not occur at all. Startups are a high risk industry. But nevertheless, in the program of social and economic development of Belarus for the period 2016-2020, the support of the start-up movement is considered as one of the directions.

Why startups are important: they create jobs, in fact, from the air. As a result, start-ups must have the tools and capabilities to create these same jobs.

"19 out of 20 startups will surely die"

– The transactions mentioned between the IT companies could be carried out before the "OEM 2.0" decree. So, all this is possible without English law institutions?

– Yes. But there is a question of enforceability – the forced execution of transactions. At that time, the question remained open. How can a court decide if there were not even the English law concepts mentioned above in Belarussian jurisdiction?

As usual, everything happened in practice. A foreign investor comes to us and says: "I want to invest in a Belarusian start-up There are two points: First: we want to invest with a convertible loan Secondly: we want to give the options of the company. Start-up team: Do you have this legislation? " Before Decree number 8 was to answer: " No ". Then he asks: "Are there risks that will not work in the courts?" And we answered: "Yes, there is."

The investor immediately says: We are creating a business, conditionally, in Cyprus, where there are these tools, and we are transporting it to your Belarusian start-up ". After all, it is necessary that investors invest in Belarusian companies, not in Cyprus.

– Convertible loan

– This is the most convenient and fastest way to finance a start According to the clbadics, we can just buy a stake in the startup, but how can you evaluate it, if the startup is at the very beginning of your trip? million, and the investor laughs – say, a hundred thousand, no more.These arguments lead to nothing.In the case of a convertible loan, an investor [таких «ранних» инвесторов иногда называют бизнес-ангелами. В Беларуси весной зарегистрировано общественное объединение бизнес-ангелов «Angels Band»] lends a certain amount of money. money, and in the next round of investments, the loan amount is converted into shares according to a certain formula – after the start of maturity, thanks to the business angel money. stage, it is possible to give a startup an estimate of the value. Therefore, it is possible to calculate the number of shares that a providential loan will transform, which is understandable, given the discount of the price of the action, because the entrepreneur has considered the potential of the startup earlier than other investors

. do not take a loan from a bank. First, the loan must be returned. Second, the bank will ask for security. Where can it be if the startup is still in development? Third, we need a business plan. If I'm going to open a kiosk with shawarma, I can calculate most parameters: how many people walk in this street and so on.

And how to evaluate the potential of the start-up? This is a completely different form of entrepreneurship, in which the business model is very difficult to calculate in advance.

In simple terms, a startup is a hypothesis. Clbadic banks will not be in such an investment. Think: they would entrust their money to the bank that gives money to the right and left to test the badumptions, read, start-up without guarantee of return?

Investors at the genetic level are laid: should shoot. " And that one lucky person, who in the intensive development process had not hypothesized, but a theorem, should recover the losses of the investor on nineteen other projects. And if this is the case, the risk premium of the investor should be high: the possibility of this bonus is provided by the presence of a stake in the start-up. It is clear that if the 39, investor only wanted to receive interest for the use of his money, so the interest rate, taking into account the statistics above, would be so high that no one would borrow it. That's why start-ups "sell" the only thing they have – stocks, and investors are willing to buy it.

Why Decree No. 8

did he succeeded? Thus, the decree number 8 was officially successful

– I had 100% success. r yourself how many businesses have recently entered the high-tech park. HTP's foreign exchange earnings are growing at an unprecedented rate. And the overall effect that the decree in general has produced on the computer ecosystem and the international image of the country, I'm not afraid of this word, is colossal. We even wrote Japanese law firms: "Do you have the same decree to say more."

The recognition of Belarus in the world is now very high. We see the influx of foreign players in the country. Soon, for example, a US public company will come to Belarus – it will open its development center in the HTP. All this became possible thanks to the decree

Investors find that jurisdictions have become similar in terms of English law approaches, and in terms of unique legal "chips" and benefits – in our country it's better. And this determines the decision of foreign players

– And in Russia and Ukraine, for example, are there such standards?

– In Russia, some standards similar to the norms of Decree No. 8 exist, but they have not yet in the law of the convertible loan agreement. This has been said for several years – and not everyone will accept it. In Ukraine, many similar rules are not yet available.

– Navskidku: in what areas is it really useful?

– All transactions for the acquisition of badets and investment. The country needs investors, not only in the field of high technology, but also in other sectors of the economy. Until July 22, there is a public discussion on the changes to the Civil Code. I note, there are very valid professional remarks. Other comments and comments from the state authorities will be received

– The company "Aleinikov and Partners" participated in the drafting of the decree n ° 8. Y did he have negative comments when it was created? Suppose some provisions are not wanted.

– Some commentators have viewed negatively the idea of ​​entering into a non-competition agreement – an agreement between an employer and an employee on non-competition. That is to say that the company pays the employee, after his departure, a cash compensation so that it does not pbad to a competitor of the former employer for a certain time not exceeding one year. This is sometimes called garden leave – say, take money and take care of the flower garden.

Commentators have said that even in California, the mecca of start-ups, this deal would not work. Works really and is very actively used. By the way, there are already companies that have tried this tool in practice

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