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Careful with the presentation of KPIs in investor negotiations

This post is also available in: Deutsch


Investor negotiations are an important part of corporate financing in the Federal Republic of Germany. Whether a startup or an established company, this critical phase can set a fundamental course for the future. Key performance indicators (KPIs) play a decisive role here. They are the figurehead of the company and the business card in every investor presentation. In Germany, however, it is crucial to present KPIs correctly and truthfully. This is because false or misleading information can not only destroy trust between the parties, but also entail legal consequences that can extend to criminal prosecution. This article is intended to provide an overview of the legal implications in Germany and to show why particular caution is required here.

Legal problems around investor negotiations in German law

False statements and due diligence

In Germany, the misleading presentation of KPIs can lead to criminal liability under Section 263 of the German Criminal Code (StGB) (fraud). A fine or even imprisonment could be the consequence. There may also be significant problems under civil law. Claims in tort, for example under Section 823 of the German Civil Code, could be brought. There is also a duty of care to investors. A breach of these obligations may give rise to liability. If false statements are even knowingly made in this context, criminal investigation proceedings could also be initiated, which in turn could entail the involvement of BaFin, the German Federal Financial Supervisory Authority.

Data representation problems

Even the misleading presentation of data that is not directly false is legally risky in Germany. The so-called deception by omission or by representation in the wrong context can also be relevant under criminal law. Under German criminal law, § 263 StGB (German Criminal Code) (fraud) or § 264a StGB (subsidy fraud) could apply here if state subsidies are involved. Not only the collection, but also the presentation of the data must therefore be done extremely carefully. An inaccurate representation could quickly be considered fraudulent misrepresentation, which carries both civil and criminal penalties. Thus, it is of utmost importance to provide not only correct, but also complete and non-misleading information.

Liability issues in German law

In Germany, liability issues play a particularly important role. Not only is there the possibility of civil claims for damages, but tort liabilities may also be triggered. Managing director liability pursuant to Section 43 GmbHG is also a relevant topic. Managing directors can be held liable both to the company and to third parties. In addition, breaches of due diligence obligations can often be legally pursued years later, which significantly increases the entrepreneurial risk. Careful documentation of all processes and decisions is therefore essential.

Investment Contracts and German Law

In German law, contracts are sacred. The principle of “contracts must be honored” (pacta sunt servanda) is deeply rooted. Investment contracts often contain a number of warranties and clauses that, if based on incorrect KPIs, could lead to a challenge to the contract or claims for damages. A careful approach is therefore not only advisable, but essential. The legal consequences of a false or misleading investment contract can have both financial and criminal consequences that can go far beyond a simple penalty.


The presentation of KPIs in investor negotiations should never be taken lightly under German law. The potential legal risks are enormous and range from civil claims for damages to criminal consequences. The weal and woe of a company can depend on the careful and truthful presentation of KPIs. It is therefore of the utmost importance to exercise extreme caution in this sensitive area and, if in doubt, always seek legal advice.

Marian Härtel

Marian Härtel

Marian Härtel is a lawyer and entrepreneur specializing in copyright law, competition law and IT/IP law, with a focus on games, esports, media and blockchain.


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