A good idea and product-market fit are enough to get angel investors or venture capital funds to the table. But the bridge between signing a term sheet and the money actually reaching the bank account (closing) is built entirely out of legal soundness.
When the fund's lawyers put your startup through due diligence, the procedural shortcuts taken to keep incorporation cheap either reduce your valuation sharply or collapse the round altogether.
Drawing on the rounds we have closed, we set out below the legal checklist that technology founders should complete before fundraising.
1. Corporate Form Is Foundational, Not Cosmetic
Getting the structure right from the outset is what keeps an investment legally possible.
The joint stock company (A.Ş.) as the standard: Angel and institutional investors generally treat joint stock company status as a prerequisite, because of the ease of share transfers, the freedom to create classes of shares (A/B), the tax treatment on exit and the availability of the authorised capital system. Share transfer mechanics in a limited company are cumbersome by comparison.Minimum capital compliance (31 December 2026): The minimum share capital is TRY 250,000 for joint stock companies and TRY 50,000 for limited companies; these figures were set by a 2023 Presidential Decree and took effect on 1 January 2024. The distinction matters: TRY 250,000 is subscribed capital, not paid-in capital, and at least 25% of shares subscribed in cash must be paid before registration (Article 344 of the Commercial Code). Under provisional Article 15, added by Law No. 7511, companies below these figures must increase their capital by 31 December 2026 or be deemed dissolved (the Ministry of Trade may extend the deadline up to twice, by one year each time). A company that has not completed this produces an immediate red flag in due diligence.Clearing out restrictive provisions: Onerous quorum requirements and unwieldy board arrangements inherited from the original articles should be revised to match the structure contemplated by the term sheet.2. Vesting of Founder Shares
No institutional investor wants a founder who can contribute an idea, leave the following year and keep the equity.
The standard structure (cliff and vesting): On investment, founder shares are made subject to time-based vesting. The common structure is four-year vesting with a one-year cliff. A founder who leaves before completing the first year is treated as having vested nothing, and their entire holding returns to the company or the other founders at nominal value. After the first year, shares typically vest in monthly instalments, and a departing founder keeps only what has vested.How this is built under Turkish law (reverse vesting): Turkish company law has no native concept of allocating shares subject to forfeiture. In practice the mechanism is constructed through the shareholders' agreement, using call options and buy-back arrangements, supported by irrevocable powers of attorney or escrow so that the transfer can actually be effected.3. Retaining the Team: The Employee Option Pool (ESOP)
Retaining key employees with equity rather than salary alone is what ESOP does. Turkish legislation does not use the term, but contractual freedom allows equivalent structures.
Conditional capital increase: Under the Commercial Code, a joint stock company may increase its capital conditionally so that employees acquire the right to subscribe for shares on satisfying defined conditions and remaining with the company. This is the closest statutory analogue to an option plan.Phantom stock and stock appreciation rights: No shares are actually issued and no voting rights arise. On an exit, the employee receives a cash amount calculated as though they held the notional percentage. A tax point: these payments are generally treated as employment income and subject to payroll withholding. The structure should be reviewed with a tax adviser before implementation.4. Intellectual Property Must Not Sit With the Founders Personally
The rule is the same in Silicon Valley and in Europe: software and algorithms left registered in an individual's name rather than the company's are a structural defect.
The remedy (IP assignment agreement): Every founder and contributor should sign an agreement assigning the rights in what they have created to the company. Even a part-time developer who wrote a small amount of code should have a signed assignment on file. Trademarks and patents should be registered with TÜRKPATENT without delay.Note the difference between employees and contractors. For an employee, Article 18/2 of the Intellectual and Artistic Works Act gives the employer the right to exercise the economic rights unless agreed otherwise. For an independent contractor that presumption does not apply, and without a written assignment the rights remain with the developer.5. Before the Term Sheet: Know Your Red Lines
The fund will send a standard shareholders' agreement. Go into the negotiation with your own positions.
Reserved matters: An investor taking 10% and a board seat may also ask for a veto over the budget and over hiring. The list of matters that cannot proceed without investor consent should not extend so far that it paralyses the founders' ability to run the business. (See our article on shareholders' agreements for the detail.)This roadmap sets out general principles of investment law for educational purposes. The specifics of your own round should be worked through with qualified counsel.
Last updated: 10 August 2026.
