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

Contact details

Geraint TilsleyDD: 029 2039 1795M: 07733 898628E: geraint.tilsley@geldards.com