While innovation and business models are critical factors for a startup’s success, governance structuring can be decisive for its longevity. A Deloitte study revealed that companies with well-defined governance practices are more likely to grow and survive beyond five years compared to those without such practices.
According to Leonardo Mezzomo, partner at Ventiur Smart Capital, accelerators play a key role in creating a more structured and sustainable business environment. “Formalizing the relationship between the investor and the invested company creates a governance need, which the startup must mature to adapt to. We are responsible for making these initial investments while also demanding – and often teaching – startups about best corporate governance practices.”
For Gabrielly Balsarin, partner at Ventiur Smart Capital, the term collaborative governance may seem complex for entrepreneurs, but at an early stage, it is simpler than it appears. “This governance primarily involves establishing a basic structure for reporting, transparency, document organization, and due diligence with investors.”
Gabrielly explains that these are the first steps for a startup to begin structuring its governance processes. “At this initial stage, it is essential to establish diligence and transparency practices that meet investor expectations.”
Shareholders’ Agreement
According to the study Governance Metrics for Startups: An Overview of the Adoption of Recommended Corporate Governance Practices, conducted by the Brazilian Institute of Corporate Governance (IBGC), only 14% of startups in the validation phase have a Shareholders’ Agreement. Among scale-ups in the traction and scaling phases, only 37% and 35%, respectively, have a signed partnership agreement.
For professional development and organizational change specialist Susana Azevedo, implementing structured governance with clear processes is essential for sustaining business growth. “More than structuring isolated areas, it is crucial to view the company as an interconnected ecosystem. The Shareholders’ Agreement enables governance based on collaboration, ensuring strategic alignment and preventing future conflicts.”
Susana is a partner at Quantum Development, a consultancy focused on mid-sized family businesses and executives of large corporations, helping organizations turn their visions and plans into reality by connecting different elements of the corporate structure. “Ideally, we encourage our clients to reflect on what the best relationship model would be—whether with the board, leadership, or between teams. Having this intentional vision is crucial because, without it, people tend to stay in a competitive and disputing mindset, focusing on who is right instead of finding joint solutions.”
In boards, Susana explains that investors often have a short-term vision, which can be a point of tension, especially in family businesses. “In these companies, investors have an emotional attachment to the business, treating it as an extension of themselves. This long-term perspective, aimed at business sustainability, often clashes with the urgency for immediate results.”
According to Tiziano Pravato Filho, CEO of Grupo Leveros, the challenge lies in dealing with the moment when that carefully crafted initial plan, filled with high expectations for success, deviates from the original course. “It’s worth noting that these plans almost never consider adverse scenarios. They are always focused on success.”
When results align with or exceed initial expectations, trust naturally grows, creating a smoother environment for cooperation. However, as results diverge from what was planned, maintaining trust and transparency becomes significantly more complex, requiring continuous effort.
Tiziano Pravato Filho, CEO of Grupo Leveros
So, when reality does not match expectations, the question arises: how do board dynamics unfold? This is a critical point. “On boards, there is a fundamental difference between the financial investor—who is accountable to their own investors and must justify any deviation from the original plan—and the management team, which deals with market nuances daily. This difference can create significant tensions,” explains Pravato Filho.
Gabrielly believes the Shareholders’ Agreement should be established from the company’s inception. “When an investor evaluates a startup, they want to understand what the entrepreneurs and shareholders have already agreed upon. This is essential to prevent future conflicts and ensure business stability.”
In a Shareholders’ Agreement, some clauses are crucial to ensuring predictability and legal security, including:
- Business participation: What happens if a shareholder wants to leave? Will their share be sold, redistributed, or remain in the company?
- Compensation among shareholders: How will salary increases and potential financial compensations be handled?
- Extreme scenarios: In the event of a shareholder’s passing, what happens to their stake? Will it be redistributed or remain with their family?
Regarding governance, Mezzomo explains that Ventiur Smart Capital focuses primarily on initial contracts, the formalized relationships throughout the company’s history, and the relationships between shareholders. “These are key aspects to ensure a solid foundation for business growth.”
Mezzomo recalls more cases where the lack of an agreement harmed a business than situations where an agreement resolved a conflict. “Generally, when a conflict already exists, it is very difficult to resolve it solely through the agreement. What the agreement does is minimize negative impacts on the business, shielding and protecting operations overall. But that doesn’t mean the conflict will be resolved because of it.”
Continuous Monitoring
When considering only governance maturity levels, regardless of the development phase reported, the study Startups & Scale-ups: Governance Maturity – A Research Depicting the Brazilian Ecosystem, conducted by Better Governance, a consultancy specializing in governance, found that approximately 40% of companies are at the Basic stage, while about 42% are in the Developing stage. Only 15% of the sample reaches the Developed stage, and just 2.4% are at an Advanced governance maturity level.
Pravato Filho believes basic indicators are among the first things that should be analyzed in a startup. “I don’t like to see an idea just on PowerPoint. I want to understand the key indicators, especially concerning Product-Market Fit. Even if the product hasn’t yet reached expected profitability, what value proposition is being created for the consumer? How can we measure this value proposition?”
At the companies invested in by Grupo Leveros, such as Uappi—a company specializing in e-commerce solutions with national reach—Pravato Filho explains that the initial focus was on understanding how performance indicators compared to other platforms and how this impacted sales performance. “For me, the two most important factors to analyze are Product-Market Fit and the founders’ commitment to the business.”
Stay Tuned
Collaborative governance is more than a trend—it is a necessity in the dynamic startup environment. Companies that adopt transparent, strategic, and inclusive practices are better equipped to generate sustainable value and tackle market challenges. In the next article in the Collaborative Governance in Startups series, we will explore how ESG commitment and building a strong governance culture are crucial for attracting investors, strengthening reputation, and ensuring the sustainable growth of startups.