Pricing the round, or deferring it

The choice is when the price is set, not whether

At this stage, a Norwegian AS can raise through a priced share issue or an instrument that defers the price.

A priced share issue settles the valuation (verdsettelse) now, issues shares now, and puts the new owners on the share register now. A deferred-pricing instrument takes the money now and turns it into shares later, at a price derived from the round that follows.

The discount and valuation cap you agree today determine how the future price will be calculated. The discount says the early money buys shares more cheaply than the next investor’s. The cap says that however the next round is priced, the early money converts as if the company were worth no more than an agreed ceiling.

The discount and cap are negotiated before payment. They affect eventual ownership even though the next round’s valuation is unknown. Model the calculation now, including the agreed share count.

You gain speed, fewer corporate formalities now, and a way through a genuine disagreement about the number. The investor gains a price fixed against a later, better-informed valuation, with downside protection built in. Neither side gains certainty.

The priced share issue (emisjon)

A priced round is a corporate act as well as a contract. The shares are created by the company under aksjeloven chapter 10, in a fixed sequence, and that sequence sets the minimum timetable.

1. The board prepares the proposal and required documents.
2. The general meeting normally decides under § 10-1, with at least two thirds of votes cast and capital represented under § 5-18, subject to stricter applicable requirements. Alternatively, the board may act within a valid registered mandate. Specify the increase, nominal value, subscription price, subscribers and deadlines.
3. For cash issues, assess shareholders’ subscription rights under § 10-4. An issue directed to outsiders normally needs an exclusion under § 10-5 or a mandate permitting it. Outsiders can also subscribe after rights have been properly offered and left unused. Check voting, capital, attendance and class rights.
4. Complete subscriptions in the required form and pay the contributions.
5. File within three months after the subscription deadline under § 10-9, after full payment. Missing this deadline prevents registration and releases subscribers. Cash-only payment can be confirmed by an auditor, eligible Norwegian/EEA financial undertaking, lawyer or state-authorised accountant. Contributions in kind require auditor confirmation and the statutory board report; the valuation must meet the four-week rule.

The filing goes through the coordinated register notification (Samordnet registermelding) in Altinn and costs nothing, since a capital increase is not one of the changes Foretaksregisteret charges for.

The 2026 registration fee schedule lists charged changes including capital reductions, name changes, mergers, demergers, relocation plans, partner changes and withdrawals, liability-share changes and prospectuses. The listed change fee is NOK 1,276 digitally or NOK 2,509 on paper. Capital increases are not listed. Check current fees when filing.

The main cost of a priced round is the legal work on the documents. The statutory steps can be completed within days once the subscribers are known; what varies is the registry’s processing time and how long the investors take over diligence and documents.

A priced round requires more corporate steps now but settles the valuation. Deferring it reduces the immediate formalities, although conversion will still require a registered capital increase later.

Deferring the price: the SLIP and the convertible loan

US-style SAFEs are not used as they stand in Norway. The Norwegian instrument built for the same job is the SLIP (Startup’s Lead Investment Paper), created by Startuplab with the law firm SANDS and launched in April 2019 to make SAFE-like deferred pricing work with Norwegian company law.

SLIP provides capital now against later shares, usually calculated with a discount and/or cap. Read the actual agreement: conversion triggers, exit treatment, priority and remedies can differ between versions. Its name alone does not determine tax, accounting or an unconditional right to shares.

Startuplab currently offers pre-money SLIP version 2.0, including a dilution-protection variant. This documents available templates, not market-wide usage.

Innovasjon Norge accepts SLIP as equity for businesses younger than five years where its funding is limited to NOK 5 million. It requires no repayment, including on breach, subordination to all debt and confirmed equity accounting. An auditor, or an eligible state-authorised accountant where the business is not audit-liable, must provide the required documentation. These are SLIP-acceptance criteria, not a general limit on all its financing.

The convertible loan (konvertibelt lån) is still available and still used, particularly for bridges where a lender wants a debt claim. Aksjeloven provides for it directly (§§ 11-1 and following).

• A company may take up loans carrying a right to demand shares issued.
• The general meeting resolves it with the same two-thirds majority as an articles amendment, and the resolution must state the loan frame and the conversion terms.
• Existing shareholders have a pre-emptive right to subscribe the loan itself, which can be set aside by the same majority.
• The meeting may authorise the board to resolve such loans within a frame.

Once the amount set by the general meeting has been subscribed, the loan resolution must be notified to Foretaksregisteret without delay (§ 11-6). Put that filing on the same checklist as the loan agreement itself.

The conversion is later executed as a registered capital increase, notified as soon as the deadline for demanding shares has expired, or, where that deadline runs longer than twelve months, within one month after the end of each financial year (§ 11-7).

The following terms determine your ownership at conversion under either instrument. Negotiate them together.

• Amount. Model all deferred-pricing instruments together with the next round.
• Discount. State whether it is an alternative to the cap or combined with it. A 20% discount is an example, not a legal requirement.
• Cap. Define pre-money or post-money and the shares, options and instruments in the denominator. Test several future valuations.
• Interest. Agree rate, accrual and payment or conversion. Do not assume every convertible uses NIBOR-linked interest.
• Maturity. State what happens without a qualifying round and whether conversion can legally be completed.
• Triggers. Address financing thresholds, sale, insolvency and any maturity date.

Discuss the tax treatment before agreeing the interest rate. Interest on a genuine loan is a deductible cost for the company (skatteloven § 6-40). That section has no special rule for shareholder loans, but other limits can apply:

• The instrument must qualify as debt.
• Related-party terms must satisfy § 13-1.
• § 6-41 can limit deductions. Main thresholds are NOK 25 million for the Norwegian part of a group and NOK 5 million outside groups. Group rules can cover external interest too. Related-party definitions, guarantees, the special rule for related parties outside the group and equity-based exceptions require assessment. Direct 50% ownership by the lender is not the sole test.

Personal lenders normally pay ordinary-income tax on interest. § 5-22 may add tax: reduce accrued interest by the ordinary-income tax rate, deduct the shielding allowance, then multiply a positive remainder by 1.72. This is not penalty tax, nor simply a comparison of gross interest with the shielding rate.

Use the published shielding rate for the relevant two-month period. Have the accountant calculate ordinary tax and any § 5-22 charge from the balance and accrued interest.

A holding company is outside the personal-lender charge in § 5-22, but its interest income still has its own tax treatment. Compare the company’s cost with the lender’s after-tax return rather than assuming higher interest has little value.

Interest is normally taxable when the lender earns an unconditional right to it, even if payment is deferred (Skatte-ABC R-10-5.1). Settling the debt in shares does not in itself turn interest into tax-free share income. Separate the accrued interest, any previously taxed amount and the tax calculation on conversion. Special rules can apply to overdue, unpaid interest outside the accounts; adding interest to principal is not the same as merely postponing payment. Ask the accountant to reconcile these amounts and the shares’ tax cost before conversion.

The conversion arithmetic, worked

Fjellrev AS has 1,000,000 founder shares and raises NOK 6 million through two NOK 3 million instruments, each with a 20% discount and NOK 40 million pre-money cap. The agreed denominator for both round and cap price is only the founder shares, excluding the instruments and any new option pool. Interest is excluded; add it separately if the loan terms provide for conversion of interest.

A year later a new investor puts NOK 15 million into a qualifying round at NOK 60 million pre-money, which makes the round price NOK 60,000,000 ÷ 1,000,000 = NOK 60 a share.

The discount gives 60 × 0.8 = NOK 48. The cap gives 40,000,000 ÷ 1,000,000 = NOK 40. The holders convert at whichever is lower, so at NOK 40.

• Holders of the instruments receive 6,000,000 ÷ 40 = 150,000 shares.
• The new investor receives 15,000,000 ÷ 60 = 250,000 shares.
• After the round: founders 1,000,000 shares (71.4 per cent), early holders 150,000 (10.7 per cent), new investor 250,000 (17.9 per cent), total 1,400,000.

At the round price the fully diluted total is worth 1,400,000 × NOK 60 = NOK 84 million. That comprises NOK 60 million assigned to the original shares, NOK 15 million of new cash and NOK 9 million assigned to conversion shares. The last amount is share value, not cash paid by the founders.

The early holders receive shares worth NOK 9 million at the round price for NOK 6 million of principal. The NOK 3 million uplift reflects their preferential conversion price. Under this example’s denominator, the extra conversion shares dilute both the founders and the incoming investor.

The same instruments behave very differently depending on how the next round is priced. Run the three cases against your own numbers before you agree a cap.

As the next round’s valuation rises above the cap, the gap between the early investor’s conversion price and the new investor’s price grows. A discount alone limits that gap proportionally; a cap does not.

Each additional instrument at the same cap gives another investor shares at that price. Model them together before closing so you can see their combined effect on ownership. A cap set at or near the valuation you expect to raise at is the price of the round, agreed before anyone did diligence.

When deferring is the better trade

Deferral is the better trade in a few situations. Each has a test you can apply before you talk to an investor.

• A small bridge. An amount that will not move the cap table much, between a signed plan and a round that is already in motion.
• A priced round that is genuinely imminent. A lead investor is committed, the terms are close, and the money is needed before the corporate steps can be completed.
• A real pricing impossibility. The company has just changed direction, or a decisive contract lands in six weeks. Where the price cannot be argued honestly, deferring it to a point where it can is better than guessing.

Deferral does not resolve a disagreement about valuation if neither side addresses it. The disagreement returns at conversion, after the money has been spent, with the cap determining the price you did not settle directly.

Before choosing, put two questions to the draft document. A bad answer to either is a reason to price the round instead.

1. What does it do if no qualifying round happens in eighteen months?
2. Once the instruments are added to your cap-table model at the cap price, is the ownership you are left with one you can still raise a next round on?

Your situation determines both whether deferral is useful and which terms need the most attention.

• First external funding. Compare SLIP, loans and a priced issue. Model total deferred funding with and without a cap.
• Shareholder bridge. Chapter 11 permits a general-meeting decision or a registered board mandate. A loan dependent on a later chapter 10 issue is different. State the dependency and assess subscription rights for the chosen route.
• Alongside Innovasjon Norge. Check award conditions and SLIP requirements, including priority, repayment and accounting evidence. Deleting a repayment clause may not suffice.
• A priced round close to completion. Align calculations and record what happens if the round changes or fails.
• A lender seeking debt protection. Negotiate maturity, payment capacity, conversion and authority to issue shares. Automatic conversion is not a universal solution.

Terms you can live with at conversion

Use these positions in negotiation and hold to the stated limits. These terms create ownership rights or creditor claims that you cannot later undo, so involve counsel if an investor will not accept them.

The most dangerous single term is the maturity fallback. The Norwegian default for a convertible loan is that if nothing has triggered conversion by maturity, the loan is repaid with interest.

A company without revenue may still have cash, but repayment at maturity may be unaffordable. Assess longer maturity, validly authorised conversion or an instrument without repayment rights. Each changes investor protection and founder dilution; none removes all risk.

Whichever instrument you sign, model it into the cap table at the cap price before signing; closing is too late.