NORWAY Trends and Developments Contributed by: Nicolai Julsvoll, Øyvind Mork Karlsen and Jørn Hove, Thommessen
• at the investor’s discretion. The key terms are typically a discount and a valuation cap, meaning the highest applicable amount used to calculate the number of shares allotted to the investor. SLIP agreements are generally less time-con - suming than negotiating investment agree - ments. Another benefit is that a price per share valuation of the company is not required, avoid - ing valuation discussions that may be difficult for early-stage companies and tax issues when employees are incentivised with shares acquired at a low price. Further, the SLIP agreement is not a loan, but an equity instrument, so the investors carry equity risk while there is no interest on the investment amount and no maturity date.
In the current economic landscape, character - ised by high interest rates, expensive financing and challenging valuations, SLIP agreements continue to be a popular alternative for compa - nies seeking capital. For investors, SLIP agree - ments are a useful tool to make the most of the current market and to secure favourable terms and higher returns.
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