Investors who hold your GmbH token have the right to return it to your company and be compensated for it (put option). However, the type of compensation is determined by you.
There are three ways in which investors can be compensated by the put option:
In this case, you decide whether you
*The market price results from the current valuation of your company.
**If a conversion of the legal form of the GmbH into an AG has already taken place or is planned within the next 9 months.
Investors who have converted their GmbH tokens into GmbH shares must, if you wish, be pooled. ****This ensures that your cap table remains clear. This can be achieved either through a traditional SPV or a contractual agreement for voting rights, etc. In practice, our experience shows that the majority of investors prefer to hold GmbH tokens rather than GmbH shares due to their tradability and that the put option is only used in the rarest of cases.
Since the exercise of the option typically does not bring any economic advantage, but on the contrary even severely restricts the transferability of the participation, it often only makes sense from the investor's point of view if one wants to make use of the legally secured co-determination and/or extended information rights that a GmbH share offers. In this case, investors should also bear in mind that co-determination is only possible in practice if they own a significant number of GmbH tokens or GmbH shares.
To ensure that the put option does not cause unnecessary work and costs, the contract template provided by Tokenize.it stipulates that the put option can only be exercised by investors once per quarter by default. The last day of the quarter then becomes the deadline for exercising the put option.
From the deadline, investors have one week to inform you that they wish to exercise the put option. It is important to ensure that investors also specify the number of tokens they wish to return. In addition, they can only return whole tokens and not smaller fractions, such as 0.345 GmbH tokens.
You also have the option to further restrict the put option. There are two ways to do this, which you can adjust in the sample contracts provided.
Firstly, you can specify the earliest date from which the put option can be exercised. This date can be freely chosen so that, for example, the put option can only be exercised if an exit is already planned.
On the other hand, it is possible to specify how many GmbH tokens an investor must hold to exercise the put option. In this way, the number of tokens to be held can be set relatively high, so that only larger investors have the opportunity to exercise the put option.
After exercising the put option, you now have 6 weeks to determine the value of the returned GmbH tokens and notify the investors who exercise the put option.
The value of the GmbH tokens is determined as follows.
If your company has been converted into the legal form of a Public limited company (in German: “AG”) and the shares are significantly traded, the average price of the traded shares is set as the value. If this is not the case, the value is determined using the highest of the three following valuation methods: