{"id":1534,"date":"2025-11-21T20:18:52","date_gmt":"2025-11-21T19:18:52","guid":{"rendered":"https:\/\/www.alkeom.law\/?p=1534"},"modified":"2026-04-15T16:12:52","modified_gmt":"2026-04-15T14:12:52","slug":"french-start-up-financing-with-bsa-air-practical-insights-from-recent-case-law","status":"publish","type":"post","link":"https:\/\/www.alkeom.law\/en\/french-start-up-financing-with-bsa-air-practical-insights-from-recent-case-law\/","title":{"rendered":"Start-Up Financing with French SAFE: Practical Insights from Recent Case Law"},"content":{"rendered":"\n
\"Lev\u00e9e<\/figure>\n\n\n\n

Inspired by the U.S. \u201cSAFE\u201d mechanism (Simple Agreement for Future Equity), the BSA-AIR allows an investor to subscribe to a warrant for future shares in the company, without requiring a valuation at the time of investment.<\/p>\n\n\n\n

Although it involves some risk for investors, BSA-AIR makes it possible to delay discussions on company valuation, which are typically impracticable during the earliest phases of growth.<\/p>\n\n\n\n

At the crossroads of corporate and financial law, BSA-AIR mechanism continues, ten years after its introduction in France, to raise complex legal questions. Below is a selection of case law from the past 18 months. In the absence of any ruling from the French Supreme Court (Cour de cassation<\/em>), we have chosen four decisions from first and second instance courts that shed light on best practices and drafting considerations.<\/p>\n\n\n\n

[Article continues below]<\/em><\/p>\n\n\n\n

\n\n\n\n
<\/div>\n\n\n\n

We advise startups, founders, and investors on structuring and closing financing deals.<\/h3>\n\n\n\n

Let\u2019s discuss your project and advisory needs\u2014we\u2019re here to guide you.<\/h3>\n\n\n
\n
\"\"<\/a><\/figure>\n<\/div>\n\n
\n
\"French<\/a><\/figure>\n<\/div>\n\n\n

<\/h4>\n\n\n\n
<\/div>\n\n\n\n
\n\n\n\n

1. Caution When Disclosing Information to Non-Shareholder BSA-AIR Holders<\/h2>\n\n\n\n

Paris Court of Appeal, 20 June 2024 \u2013 No. 22\/19051<\/a><\/h5>\n\n\n\n

This ruling underscores the boundaries of an issuer\u2019s duty to inform BSA-AIR holders, who only acquire shareholder status upon conversion. When sharing information involving third parties, issuers must take particular caution to avoid engaging the liability of the company or its officers.<\/strong><\/p>\n\n\n\n

In the case at hand, the former CEO of a French simplified joint-stock company (soci\u00e9t\u00e9 par action simplifi\u00e9e<\/em> \u2013 SAS) challenged his dismissal, claiming it was abusive. He argued that the chairman should not have informed BSA-AIR holders of the planned dismissal and its reasons (including disputes and \u201cirregular expenses\u201d) before the general meeting scheduled to decide on the dismissal. According to him, this disclosure to non-shareholders involved confidential governance information, anticipated the vote 18 days ahead, and breached the company\u2019s duty of loyalty to its executive.<\/p>\n\n\n\n

The Court of Appeal confirmed that BSA-AIR holders were not entitled to the same information as shareholders. The communication, which made the dismissal and its context public, was deemed vexatious. The company\u2019s argument based on an information duty under the BSA-AIR agreement was rejected: that duty only concerned risks to the company\u2019s activity or prospects, which was not the case here. Consequently, the dismissal was held abusive, and the company was ordered to compensate the former executive.<\/p>\n\n\n\n

Practical takeaways:<\/mark><\/em><\/strong><\/mark><\/em><\/strong><\/em><\/strong><\/strong><\/mark><\/em><\/p>\n\n\n\n