Workshop by Karin Oberlin and Thomas Nabholz on the occasion of the ISIS) seminar on May 27, 2024 entitled "Legal and tax aspects of typical forms of financing in the start-up lifecycle"
Note: This language version is an automatically generated translation. The text may therefore contain linguistic and terminological errors.
view in original language (German)In May 2024, Andrea and her boyfriend and partner Johnny decide to jointly establish a stock corporation, StyleBooking AG, whose purpose is to develop an appointment booking and payment software solution for hairdressers. Andrea and Johnny establish StyleBooking AG with total savings of CHF 50,000, each subscribing to half of the share capital of CHF 100,000 and paying up half of their respective shares.
Andrea and Johnny work diligently on developing the StyleBooking software. While Johnny programs, Andrea handles all other aspects and achieves initial success in selling the software solution to hair salons. The two do not pay themselves a salary, work from home, and have no employees. Nevertheless, Andrea and Johnny realize that they cannot continue this way in the long run; first, they are running out of the savings they use to cover their living expenses, and second, they are simply making too little progress when there are only the two of them. Andrea and Johnny have created a business case that estimates they will need at least CHF 1.5 million over the next two years to develop the StyleBooking software to market readiness and drive its sales. They are considering how they could raise these funds for StyleBooking AG.
At a networking event in January 2025, Andrea meets angel investor Madeleine, who shows great interest in StyleBooking AG. Madeleine is not only willing to invest CHF 100,000 herself but also connects them with numerous contacts from her network. Between February and August 2025, Andrea and Johnny succeed in raising a total of CHF 900,000 in the form of convertible loans from Madeleine and 17 other private investors. These are individual contracts with varying terms and conversion discounts ranging from 22% to 30%.
Since the funding sources within the FFF circle have now been exhausted, but there is still a significant funding gap to fulfill the business plan, Andrea and Johnny turn to Coiffure Suisse, the Association of Swiss Hair Salons. With the association’s support, they succeed in December 2025 in placing 12 additional mandatory convertible loans of CHF 40,000 each with hair salons in a single transaction, under uniform terms, namely at a bullet-maturity interest rate of 1% p.a. and with a conversion discount of 22%.
Since a financing gap remains even after the convertible bond, Andrea and Johnny dip into their last private savings and grant StyleBooking AG an interest-free shareholder loan of CHF 50,000 each in February 2026 with a two-year term. In addition, Andrea is able to persuade the IT supplier—through a charm offensive—to agree verbally to freeze its purchase price claim of CHF 20,000 for 18 months. In return, she promises, on behalf of StyleBooking AG, a payment of CHF 21,500.
Andrea has found a German venture capital (VC) fund that is willing to invest CHF 1,000,000 in StyleBooking AG. She contacts her lawyer, Maria, to negotiate the terms. Maria strongly advises her not to take out another convertible loan but to conduct an equity financing round with a capital increase, during which the outstanding convertible loans will also be converted into equity. The VC agrees to this and takes on the role of lead investor; a few additional investors are also expected to join. A valuation of StyleBooking AG at CHF 10 million is agreed upon.
The VC first conducts due diligence, which leads to the following finding:
In 2021—three years before the founding of StyleBooking AG—Johnny founded IT Services GmbH. He is the sole shareholder and managing director of IT Services AG. IT Services AG is dedicated to IT consulting and the programming of IT solutions for third parties. While Johnny did offer such services and had third-party clients, he simultaneously began developing the StyleBooking software whenever he was not fully occupied with projects for third parties. Over time, this activity took up an increasingly larger portion of his total working hours.
Johnny was convinced of the potential of the StyleBooking software and decided to register the "StyleBooking" trademark as a precautionary measure. The registration was made in his own name.
In mid-2022, Andrea, who also believed in the success of the StyleBooking software, decided to quit her job at a bank and instead support Johnny in developing the StyleBooking software. She took on all tasks not related to programming; in particular, she established contacts with numerous hair salons to introduce them to the StyleBooking software and market it to them.
Soon, the first sales successes began to materialize, and in 2023, IT Services GmbH signed license agreements with numerous hair salons for the StyleBooking software.
IT Services GmbH therefore had initial revenue consisting of license fees for the StyleBooking software, as well as (declining) revenue from the other work Johnny performed for third parties. IT Services GmbH did not pay any wages to Johnny or Andrea; instead, all revenue was invested in the development and expansion of the StyleBooking software business.
Andrea was increasingly dissatisfied with this situation, since Johnny was the sole owner of IT Services GmbH. The two therefore decided in 2024 to jointly found StyleBooking AG, in which they each hold a 50% stake (see Case 1).
From the time StyleBooking AG was founded, Andrea and Johnny represented the company to third parties under this brand and also entered into license agreements with new customers through StyleBooking AG. However, existing contracts were continued with IT Services GmbH, and revenue from these contracts continued to flow through IT Services GmbH. Otherwise, IT Services GmbH did not conduct any further business from that point on; Johnny focused 100% on the further development of the StyleBooking software and no longer accepted orders from third parties.
After the merger is completed, the capital increase at StyleBooking AG is also carried out. Maria prepares the necessary documents together with the notary. In October 2026, the capital increase is notarized.
StyleBooking GmbH’s business is thriving; one in five hair salons in Switzerland already uses the StyleBooking software. However, this means StyleBooking AG’s growth is reaching its limits, as there aren’t many hair salons left in Switzerland that want to digitize their booking and billing processes and aren’t already using the software.
Johnny and Andrea are therefore discussing a potential expansion into Germany with the VC. The VC is willing to support them in this endeavor and invest another million. However, the additional funds are to be raised through bank financing, as the VC does not want to further dilute its stake.
Switzerland Bank AG is willing to grant StyleBooking AG a loan, but not an unsecured loan; instead, it requires collateral.
To finance the Europe-wide rollout of the StyleBooking software, Andrea and Johnny begin negotiations with the American private debt firm Greed Capital in the summer of 2030. Through its Cayman Islands-registered Senior Debt Fund IV, L.P., Greed Capital offers StyleBooking AG a loan of CHF 8 million for four years at an interest rate of 8% per annum.
Now that all convertible loans from 2025 have been converted as part of the Series A financing round and the individual loans from 2026 have been repaid, StyleBooking AG currently has only the bank loan from 2027 outstanding.
