Equity Investment and Company Fundraising

Whether you are a private/angel investor, a company embarking on a round of fund raising, an investment or venture fund or a management team, our Corporate Private Equity Solicitors at Myerson have a wealth of experience and understand the challenges that are involved in private equity from all stakeholder perspectives and can help and advise on a legal structure, the right investment agreement and fundraising process that suits all parties.

Advising the Investor or Manager

If you are an investor, we understand that you are looking to maximise the return from your investment whilst minimising your risk. We assist with legal due diligence and the taking of appropriate warranties in the investment agreement from the target company and its management team, whilst at the same time ensuring you have options open to you should the company or management fail to perform as expected. Working with your accountant/tax advisor, we can also help to ensure that your investment obtains the best tax reliefs that may be available, including, for example, consideration of Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) tax reliefs.

For the management team, we know that there  is a delicate balance to be made between raising enough equity and debt finance to properly finance and grow the business of your company, whilst maximising the value of your retained shareholding and that of existing shareholders and minimising your personal exposure under the terms of the investment agreement. Where the management and company are required in the investment agreement to give warranties, it is our job to make sure appropriate disclosures are made against investment agreement warranties and that the company’s and management liability is limited to an appropriate level.

We can also advise on getting the capital structure of your company right to ensure that it is attractive to equity investment.

Debt versus Equity

Investment into a company is normally by way of debt (i.e. loans) or by way of equity (i.e. subscription for shares). The investment may also be a combination of both or potentially a hybrid, for example by issuing a loan note instrument which is convertible into shares or the issue of preferred redeemable shares.

When considering debt finance, it is also necessary to consider security for such debt, including taking a debenture over the assets and undertaking of the company.

This may require entering into inter-creditor arrangements or deeds of priority  with other existing creditors of the company, including its bank, management and other investors.

Whether a deal will involve debt or equity will depend on many factors, including the financial circumstances of the company, the amount of share capital the existing management are willing to dilute by and the general level of risk of the business of the company.

We can advise on the many options available to ensure that the risk of the investment is fairly balanced as between the investors and the management.

Depending on the type of investment being made, the following documents will be required.

Investment Agreement

This will set out the main terms of the investment agreement and will include the following provisions:

• Warranties to be given by the management team
• Provision of financial Information
• Appointment of directors/observers
• Restrictions on management

Investment Articles of Association 

The company’s articles of association may need to be amended to provide for the following:

• Share Classes– Good Leaver/Bad Leaver/Early Leaver provisions 
• Anti-dilution
• Pre-emption rights on transfer and issue of shares
• Drag along/tag along rights

• We have been ranked as a Top Tier law firm by the Legal 500 for the last seven years.
• You will receive city-quality corporate law advice at regional prices.
• Price transparency - we provide our clients with an estimate at the outset of any piece of work with ongoing updates throughout the matter.
• Our 5 Corporate Partner led service ensures you receive the very best legal advice and commercially minded support.
• We have a large team with experience across a diverse variety of sectors, focused on achieving your objectives and hitting your deadlines.
• We are a full-service law firm operating from a one-site office, which means our teams communicate effectively and efficiently and our Corporate Lawyers can draw on support from other specialist lawyers such as property and employment lawyers.
• Our Corporate Solicitors use the latest technology to ensure that we are working as efficiently as possible and that geographical distance is no bar to us from providing you excellent client service.
• We were the winners of ‘Corporate Team of the Year 2021’ at the Manchester Legal Awards.
• Take a look at the Myerson Promise for further benefits of working with us here.