Castrén & Snellman delivers Series Seed 4.0 – A generational overhaul of Finland’s standard seed financing documentation

The updated suite comprises a Term Sheet, an Investment Agreement (replacing the former Subscription Agreement), and a Shareholders’ Agreement, and reflects practitioner and investor feedback, updated regulatory requirements, and the alignment of Finnish market practice with international venture capital standards.

Visit Startup Foundation’s website to access the documents.

Developed through extensive dialogue with founders, investors, and other key players across the market, the updated suite is materially more structured, more aligned with international VC practice, and better equipped to accommodate the complexity of real-world transactions than its predecessors.

Key updates

• Three-tier leaver classification. The previous two-category framework (Bad Leaver and Good Leaver) has been replaced by a graduated three-tier system introducing an intermediate “Early Leaver” category for voluntary resignations without cause. Pricing consequences escalate accordingly, bringing Finnish practice closer to international standards and ensuring greater economic fairness for departing founders.
• Structured primary and secondary liability regime. The company now bears primary liability for warranty breaches, with founders’ liability becoming secondary and capped at 30 per cent of the amount invested by the relevant investor. Customary de minimis and basket thresholds apply.
• Sanctions and AML compliance provisions. Reflecting the changed geopolitical landscape, the documents introduce comprehensive sanctions-related representations and warranties, together with KYC and AML documentation obligations for shareholders.
• Compensatory issue and compensatory sale mechanisms. Investors may now elect to receive compensation for warranty breaches by way of new preferred share issuances rather than cash, preserving the company’s liquidity at a critical stage.
• Streamlined material breach and remedies framework. The lengthy catalogue of specific redemption events in version 3.0 has been consolidated into a single, workable material breach framework with a thirty-day cure period.
• Exit transaction cost allocation. A new provision allocates trade sale transaction costs in line with prevailing Nordic market practice, with collective costs borne by the company and individual costs borne by each shareholder.
• Refined participation rights, holding company provisions, and drag-along mechanics. Pro rata participation rights now sit exclusively with preferred shareholders, with an explicit overallotment right. New holding company provisions and a clearer qualified majority drag-along threshold (two-thirds of all shares, including more than 50 per cent of preferred shares) have also been introduced.

For a deeper dive into the key updates, visit our blog.

High-quality, freely available standard documentation for Finland’s startup ecosystem

Castrén & Snellman’s Private Equity and Venture Capital team, led by Jarno Tanhuanpää, Tuomas Honkinen and Jussi Mäkikangas, is proud to have prepared Series Seed 4.0 on a pro bono basis in collaboration with Startup Foundation — a deliberate choice reflecting the firm’s conviction that investing in the foundations of the ecosystem is every bit as important as advising on the individual transactions that take place within it.

High-quality, freely available standard documentation is one of the most powerful tools an ecosystem can have. It reduces friction, lowers costs, and sends a clear signal to international investors that Finland is a place where deals get done efficiently and on predictable terms,

Managing Partner Jarno Tanhuanpää says.

Castrén & Snellman is one of Finland’s leading law firms, with a long track record of advising on the transactions that shape the Finnish startup ecosystem, from pre-seed rounds through to growth-stage financings and exits.

Startup Foundation is a Finnish non-profit organisation dedicated to developing the Finnish startup ecosystem. Series Seed documents are published under a Creative Commons licence and are freely available at https://www.startup-saatio.fi/seriesseed.