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Investing in UK private companies

Investing in UK private companies

Overview

Investing in private companies can be an attractive option. Government policy in recent years has been aimed at encouraging investment in private companies. With the advent of crowdfunding platforms, it has never been easier for private investors to invest in private companies. While such investments can seem attractive, they can be highly risky. Besides understanding the commercial risks, investors should seek legal advice as having the right legal structure and protections in place can help mitigate the risks of investing in private companies.

Michael Moore, a Corporate Finance LLP Partner, has advised investors and investee companies on the legal aspects of private company investments for many years. Michael offers training to those considering investing and to investee companies seeking investment.

Course Outline

Reasons for investing

  • Potential attractive return on investment
  • Tax advantages (roll over, SEIS, EIS, Entrepreneurs Relief)
  • Involvement opportunity

Pitfalls

  • Investment risk
  • Lack of liquidity
  • Yield
  • Transparency

Routes to investment

  • Public markets
  • Venture capital trusts
  • Business angel networks
  • Venture capital and private equity funds
  • Crowdfunding
  • Friends and family

Preliminary considerations

  • Due diligence
  • Management team
  • Co-investors
  • Business Plan
  • IPR ownership

Legal agreements

  • Subscription agreement and shareholders’ agreement
  • Articles of association
  • Service agreements
  • Loan notes

Key Terms

  • Warranties
  • Information rights
  • Covenants (management and investee company)
  • Governance (NEDs, investor directors and reserved matters)
  • Anti dilution
  • Transfer restrictions and pre-emption on transfer
  • Good and bad leavers

Cost

£50 + VAT per person

* £750 + VAT per organisation (for 30 attendees or less – £75 + VAT per additional delegate)

** Please note all our training sessions are non-refundable but places are transferable.

“best and most useful training I have attended in a long time – many thanks”

Register Interest

Time: 2:40 PM—5:00 PM

Location: Paris Smith LLP

Cost: £50 + VAT per person
£750 + VAT per organisation (at your offices) *