In December 2014, nine former employees of a bankrupt IT company in Zwolle started a new company: OrangGO. It specialises in the development of sophisticated software. Expertise and ambition were present in abundance. However, the complexity of the organisational structure and contract formation required specific and high quality legal and tax knowledge.
In order to tackle that, the company turned to De Haan Lawyers & Solicitors. And more in particular to Albert Kraster, who has been connected to the office as a solicitor since 2002 and specialises in business law, corporate law and real estate law. He also has a pragmatic view of notarial legal issues and maintains an effective approach. These skills came in very handy at the start of OrangGO.
In October 2014, the IT company Salland Engineering Software in Zwolle went bankrupt. Assets of Salland were partly taken over by the American multinational PDF Solutions. PDF Solutions also asked several software specialists from Salland to start a company in order to carry over the support and maintenance of existing products. And such with the guarantee of an exclusive contract.
Nine specialists then decided to join forces and collectively take the plunge into entrepreneurship. As complementary partners, each had their own field of expertise. "That's been the approach from the beginning," says André Stoelwinder, one of the partners. "We could only take this step by operating as a team. All the expertise was needed to commit ourselves to the client.’’
When materialising the initiative, several issues surfaced. "The search for a good company structure, contract formation with a US party and starting a business with nine partners. And the request to start as soon as possible,’’ Albert Kraster explains.
That was not easy, because in addition to the legal issues, the 'human aspect' also played a role. "Especially because everyone had to become entrepreneurs, while we were technicians," says partner Henri Hannink. "This requires a different mindset, which makes you agree on the benefits, as well as on various conditions and risks. That can be a stumbling block, and you have to properly arrange such things. Fortunately, we could always rely on the expertise of Albert and present issues to him.’’
Kraster: "I consider that my role, even beyond the legal advice. Based on a relationship of trust, because that’s where it begins. I once started as an entrepreneur myself and I therefore know what pitfalls exist and how to handle those. I also understand the sensitive issues. It’s totally understandable that the ‘home front’ also has questions. When you have a company of nine partners, that plays an even greater role. It’s therefore all about cooperation between the partners, the home front and the legal advisor, whereby the latter adds obvious value.’’
You need advice, otherwise it will fail.
From the solid bonds of trust, the company was built from scratch. It started with the corporate structure which was in need of an appropriate form. Thanks to the advice of Albert Kraster, this resulted in a holding structure with an operating structure, an intermediate holding company and nine personal holdings at the top. This structure was perfected by means of a cooperation agreement between the nine partners.
After the establishment was a fact, Kraster also went through the contract with the US client. This was difficult, because of the conflicting rights between American law and Dutch law. After consultation with the client, a good solution was found.
Despite the complexity of factors, the articles of association were signed after only two weeks. “The compilation of this document has happened in a very good and efficient way," says Kraster. "There has been very constructive cooperation with the ambition to create something good, since all parties involved have added to it in an excellent way. By fulfilling commitments, being concrete and, if necessary, switching quickly. This has resulted in a great dynamics and finally in a wonderful company.”
In December 2014, the company was finally launched under the name OrangGO, referring to Netherlands (Orange) and ‘GO’ as a sign of ambition. OrangGO develops software. "We create software that improves semiconductor testing, making it more efficient and faster," Henri Hannink explains. "Think of chips that are present in almost all electronic devices such as televisions, telephones, cameras, cars and millions of other products.’’
"These chips will only be built in if it is proven that they work properly. When it comes to airbags, this is even of vital importance. There is an entire process dedicated to developing, producing and testing them. We aim to improve the test process at micro level using our software. Our product is actually knowledge; the expertise is present within our company.
The knowledge is so specialised that OrangGO Europe has no competition. At present, the company works exclusively for PDF Solutions which has agreed to a one-year contract with the option to extend it for another two years. Nevertheless, they are already looking at the future. "We are ambitious and there is a good basis to also serve other clients in the future. We should be talking to Albert Kraster about this soon,’’ says Hannink.
Allied to the technological developments, OrangGO has a bright future. Stoelwinder: "Chips will play a decisive role in the coming years. For example, in the automotive industry, medical sector and even in everyday life we use more and more electronics. The possibilities are endless. We are partly responsible for that ourselves.’’
They are very happy when looking back on it all. "We are a team that plunged into the adventure and became entrepreneurs with a holding company, an operating company and nine personal holdings. You don’t think that you will need advice and support ahead of time, but without it, it will not work. In the process, De Haan played a very important role, which had the advantage that the lines of communication were good."
Albert Kraster nods in agreement. "This is an important feature of our office, as is the fact that we are good at complex cases and thereby clearly offer added value to entrepreneurs. With advice, attention, time, expertise and by being able to quickly switch, alongside the goal to achieve optimal results for the client."
"I always advise entrepreneurs who start a business to look for a good accountant, tax consultant, lawyer and solicitor ahead of time, even though you may not need them immediately. Use specialists you can fall back on if you need them urgently, and with whom you are in safe hands. This can prevent a lot of the problems and it makes you stronger eventually and more successful as an entrepreneur."