NORWAY Law and Practice Contributed by: Ylva B Gjesdahl Petersen, Marius Holm Rynning and Johan Fredrik Brende, Thommessen
of the marketing authorisation across the EU/ EEA.
The increased venture capital deal activity in 2024 and so far in 2025 has resulted in less com - plexity and more efficient processes. Existing lead investors are following up their investment with their pro rata share in the new financing rounds, meaning that the shareholders’ agree - ment to a lesser extent is renegotiated, but often is limited to adding an additional layer of liquida - tion preference. New investors normally have separate counsel. Among existing investors and founders, wheth - er they have joint or separate counsel varies, depending on how aligned theirs interests are in the new round. 3.3 Investment Structure Investors normally invest in start-ups and growth companies by acquiring preference shares, as opposed to common shares. The Norwegian Companies Act allows for separate share classes with different rights if regulated in the company’s articles of association. Preference shares gen - erally have rights that are more advantageous than common shares, such as liquidation, anti- dilution and distribution preferences. Venture capitalists and larger investors will accordingly typically demand preference shares, but it is also not in any way uncommon that investments take place in common shares. 3.4 Documentation In Norway, a venture capital or growth invest - ment is normally done on the basis of: • a term sheet (optional); • an investment agreement; and • a shareholders’ agreement. In order to complete the financing round, a num - ber of corporate documents are also required:
3. Investments in Venture Capital Portfolio Companies 3.1 Due Diligence The level of due diligence conducted by ven - ture capital fund investors varies a lot, mostly depending on the stage of the target company. In early-stage venture capital investments (seed to Series A/B), the venture capital funds have a strong focus on the commercial/financial due diligence, while the legal due diligence is nor -
mally limited to the following topics: • cap table and dilutive instruments;
• employment agreement for founders and key employees, including incentive programmes;
• ownership to technology; • material agreements; and • disputes.
For investments in later-stage companies (Series B/C and later) and in growth companies, the due diligence is normally more detailed and gener - ally in line with what one would typically see in a private equity buyout due diligence. 3.2 Process In 2022‒23, raising financing for growth compa - nies became increasingly difficult. In addition to bringing the valuation down, the anchor inves - tors requested downside protection, while also wanting a larger share of the upside than what their stake would imply if things go well. These factors resulted in more extensive negotiations, complex structures and drafting rounds, and – for many Norwegian VC companies – this has been the case for financing rounds in 2024 as well.
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