POLAND Law and Practice Contributed by: Rafał Celej, Arkadiusz Klejnowski and Karolina Piotrowska-Andryszczyk, Kondracki Celej
ing adopting the capital increase and AoA changes; and • ancillary documents, such as disclosure let - ters, consent waivers, side letters and regis - ters of shareholders. There is no standardised template commonly used across the Polish VC ecosystem. Docu - ments are typically prepared on a bespoke basis, using law firm precedents or adapted from prior transactions. Market terms are generally aligned with European practice, but always negotiated individually depending on the investor profile, the public funding components and the com - plexity of the round. Several Polish VC funds also maintain their own investment documenta - tion models, which serve as starting points for negotiations. 3.5 Investor Safeguards VC investors in Poland typically negotiate a range of protections for downside scenarios, including: • liquidation preferences, often 1x non-partici - pating, entitling investors to the return of their original investment amount before proceeds are distributed to common shareholders; • anti-dilution protections, typically based on the weighted-average method, with full-ratch - et clauses used sparingly; • pre-emption rights on new share issuances to preserve their ownership percentage, often paired with rights of first refusal and tag-along rights on secondary sales; • put options/redemption rights, occasionally used to secure investors rights to sell their shares under specific conditions; • information rights, including access to regular financial and operational updates, financial statements and business plans; and
• reserved matters, a defined list of strategic or fundamental decisions that cannot be taken without the consent of a specified majority of investors (eg, capital increases, M&A, divi - dend policy). Recent market conditions have led to stronger investor positions, particularly in down rounds, with stricter milestone conditions, board seat rights and enhanced governance levers. 3.6 Corporate Governance VC investors in Poland typically exercise govern - ance influence through contractual rights set out in the SHA and their position as shareholders under the AoA. While the SHA establishes a pri - vate contractual framework for investor protec - tion, key governance provisions are often reflect - ed in or incorporated into the AoA to ensure legal enforceability against the company and third parties, in accordance with Polish corporate law. Common mechanisms include: • a list of reserved matters, requiring investor consent before the company can take certain actions. These typically cover new share issu - ances, debt financing, changes to the busi - ness model, core asset disposals or dividend distributions; • the right to appoint a member of the super - visory board or observer to the supervisory board, which is more common in later-stage or institutional rounds. • individual rights under the SHA, granted to specific investors or investor classes, includ - ing veto rights or enhanced information access; and • in specific cases, especially in distressed or turnaround situations, investors may negoti - ate the right to nominate or approve a mem - ber of the management board to act as CFO.
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