Setting up a deeptech startup in Switzerland

Switzerland is one of the most fertile grounds in the world for deeptech: frontier research, centres of academic excellence, an ecosystem that turns patents into companies, and capital willing to finance technologies that take years to reach the market. But a deeptech startup — quantum, biotech, new materials, robotics, applied AI — poses structural problems different from those of a software startup. Long cycles, capital intensity, intellectual property at the heart of the value: the structure must be designed thinking about where you will be in five years, not where you are today.

The legal form: the AG is the natural choice

For a deeptech company intended to raise capital, the form is almost always the AG (public limited company): minimum capital of CHF 100,000, of which at least 50,000 paid in. The reasons are structural:

• shareholding not entered in the commercial register, suited to founders and investors;
• a structure geared to financing rounds, capital increases, shares with different rights;
• an institutional image towards professional investors, funds and industrial partners.

The GmbH is possible in the embryonic phase, but conversion to an AG comes anyway when the first serious investor enters: it is often preferable to start out as an AG to avoid a conversion halfway through.

Intellectual property: the real asset

In a deeptech company the value lies not in a product already sold, but in the protected technology. Hence a non-negotiable rule: the intellectual property must sit inside the company, not in the hands of the individual founders or of the research institute from which the project originated.

This requires attention on three fronts:

• assignment of the IP to the company through clear agreements with founders and collaborators (assignment clauses);
• management of the rights coming from the university or research centre, often governed by licence or spin-off agreements that must be negotiated before incorporation;
• patent strategy: what to protect, where, and when to file relative to scientific publication.

An investor conducting due diligence looks at the cap table and the IP before anything else. Fragmented or poorly assigned IP blocks the round.

Cap table: protect it from day one

The cap table — who owns what — is the document that will accompany the startup at every round. Mistakes made at the outset are paid back multiplied at the end:

• an unbalanced split among founders, or one without vesting (the shares maturing over time), which exposes the company if a founder leaves early;
• shares handed over too soon to advisers or business angels on terms that later scare off the funds;
• the absence of a reserved pool for future key employees.

Setting up founder vesting, an employee participation plan for talent and transfer rules from incorporation is what makes the startup “investable”.

Staged capital and financing

Deeptech is capital intensive and burns cash for years before revenues. Financing typically arrives in stages: own funds and friends, then business angels, then rounds with venture capital funds, often alongside innovation-support and subsidised-finance instruments available in Switzerland for projects with strong technological content. Each stage has its own legal instruments — capital increases, preferred shares, convertible loans — that must be used consistently so as not to clog the cap table.

A relevant technical point: any dividends would incur the 35% withholding tax, but in the growth phase the question is theoretical — the value is built in the equity, not in the distribution.

Substance and governance

Even a deeptech company must have real substance in Switzerland: a team, a laboratory or R&D, decisions taken on the ground. This is not only for tax robustness, but because substance is what grants access to the ecosystem — talent, capital, incentives. On the governance front, the entry of investors brings shareholders’ agreements, information and veto rights, board composition: structuring them well protects both the founders and those putting up the capital.

The mistake to avoid: postponing the structure “until after the product”

Many deeptech teams, immersed in the technology, view the structure as a problem to be tackled when the investor arrives. It is the most costly mistake: when the fund arrives, poorly assigned IP, a messy cap table and the absence of vesting cause the round to collapse or to be renegotiated on worse terms. The right structure must be built before seeking capital, not during.

How SIH ONE approaches the topic

The ventures division of SIH ONE structures deeptech startups starting from the legal form and the assignment of the IP to the company, sets up the cap table, vesting and participation plans, prepares the documentation for the rounds and coordinates the financing and subsidised-finance instruments available. The goal is to arrive in front of investors with a structure that passes due diligence without surprises.

Are you building a deeptech company and want the right structure before the first round? Let’s talk about your project: we set up the form, IP and cap table on your real case.