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Geraint TilsleyPartner, Corporate
Smoothing the path to investment
Smoothing the path to investment
• Legal issues – not commercial or financial• Before the investor comes on the scene• During the investment process
Before the investor comes on the scene• What do investors like to see?• Certainty• Clarity• No loose ends• Nice easy due diligence process
What can you do in advance?• Good housekeeping• It’s not just about keeping out of trouble• Also about showing the investor there will be
no problems down the road
Common examples (1)
Employment contracts/terms•Are they in place?•Restrictive covenants – non-compete and non-solicitation•Confidentiality
Terms and conditions of sale and purchase•Do you have any?•Are they in good shape?•Do your procedures work?
Common examples (2)
Common examples (3)
Intellectual property rights•Consultants and employees•Licence agreements•Change of control clauses•Registrations – are they in the right name?
Common examples (4)
Property leases•Flexibility•Dilapidations liabilities and schedules of conditions
Common examples (5)
Corporate records•Companies House•Register of members•Former shareholders•Missing shareholders•Small shareholders
• Pensions and auto-enrolment• Data protection• Consumer credit• IT licences• Litigation and disputes
Common examples (6)
• Flush out the investment terms early• Heads of terms• Negotiate difficult points early• Take advice early
During the investment process
Share transferability•Tax planning•Succession (family and business)•Good and bad leaver provisions
Common sticking problems
• Exit and liquidation preferences• Preferred dividends
Economic rights
• Board composition?• Observers?• Swamping rights – triggers?• Costs and fees
Other issues
Cardiff Derby Nottingham
Thank You
