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Investing into a company? Laceys top 5 points to consider.

30th May 2018 by Victoria Boynes-Butler

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Angel investing comes with risk but it can lucrative; the key is to do your due diligence.

Laceys have established themselves as trusted advisors to local investors and to businesses looking for investment, and following are the top 5 points we feel you need to consider before investing:

  1. Day to day. How much do you want to get involved in the day to day running of the company? It is important to establish the parameters of your relationship from the outset; whether you want to be a part of the management team or merely updated as to the progress of the business at set intervals.
  2. Veto rights. You’ve bought into the management team, they are part of the reason you decided to invest, but you will also want to protect your investment. One way of doing this is to include veto rights over certain decisions e.g. director’s salary, sale of the business and fundraising. However, when exercising veto rights, bear in mind that most successful business relationships involve compromise.
  3. Warranties. A lot of information has usually been provided to you which you have relied upon when determining whether to take a seat at the table. Warranties (promises) can be provided to protect your position by backing up the representations which have been made to you during the pre-investment phase. Examples of typical warranties included are in respect of the business plan, IP, employees, liabilities of the company and tax.
  4. Warrantors. Who is willing to stand behind the assurances given? Generally, you would expect them to be given by the company, the shareholders and maybe the directors. You must remember that warranties are only as good as the financial worth of the parties giving them to you.
  5. IP protection. In today’s landscape, IP is a crucial asset of the company which must be protected and managed to maintain a competitive advantage. IP may increase a company’s valuation, decreasing the risk of the investment and making it an appealing acquisition target.

This is not an exhaustive list of things to consider when investing into a company, but is a good starting point.

If you wish to discuss your investment or as a business owner would like to prepare your business for investment in the future, please get in touch with Victoria Boynes-Butler of the Company Commercial team at Laceys, sponsorship partners of Dorset Business Angels, at v.boynes-butler@laceyssolicitors.co.uk or on 01202 205027.

Victoria Boynes-Butler

Solicitor — Corporate and Commercial

Direct dial: 01202 205027
Switchboard: 01202 557256

Email

  • “First Class Service. ....Sam and Victoria were an absolute pleasure to work with whilst expertly guiding us through the pitfalls of the merger.”

    Caroline Kelleway, Burns Property Management and Lettings Limited

  • “We would like to thank Victoria and the rest of the team at Laceys for helping us in a very professional, efficient and courteous manner complete the acquisition of the Cottage Lodge Hotel in Brockenhurst.”

    Maurizio Redaeilli, Cottage Lodge Hotel Limited

  • “I was pleased to work with Sam and Victoria who managed to simplify this matter for us, and explain the intricacies of the transaction at each stage and advise us accordingly. They provided great flexibility in working with us both and guiding us through this whole transaction. Many thanks.”

    Tim Townsend, Hamilton Townsend

  • “Only fools make big, long term decisions without gaining sound advice and I am so glad to have been able to share my big burden with such understanding and competent professionals as Victoria. Although I had some end objectives I could never have worked out the best way there without their help.”

    Piers Chichester

  • “Very good service, plenty of off-road parking, made our life easy and helped us sort out a difficult situation and explained it to us in layman's terms.”

    Richard Wayles, Meridian Electrical Contracting Limited

  • “An extremely efficient firm of Solicitors, who have dealt with my family legal needs as required for at least 20 years, even though I have moved to Australia after living in Dorset all my life.”

    Judith Brown

Victoria is a member of our Corporate and Commercial team having recently relocated back to Bournemouth from London. Victoria has advised businesses, charities and individuals across a range of sectors, specialising in corporate acquisitions and associated finance and commercial contracts.

Victoria adopts a pro-active, straight-forward approach in helping clients achieve their long-term business aims.

Outside of work Victoria makes the most of living on the South Coast with long walks in the New Forest and paddle boarding in Sandbanks.

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