About Techcelerate Ventures
Tech Investment and Growth Advisory for Series A in the UK, operating in £150k to £5m investment market, working with #SaaS #FinTech #HealthTech #MarketPlaces and #PropTech companies.
Preparing for an Exit – Legal Aspects
Presentation to Techcelerate, 29 April 2022
Stuart Scott-Goldstone, MA MBA
Partner and Head of Corporate/Commercial Team
Aaron & Partners LLP
t: 07812 172567
e: stuart.scott-goldstone@aaronandpartners.com
w: aaronandpartners.com
Initial considerations
• What are your objectives?
•
Realisation of investment, new role, new challenges or taking a break/retirement?
• How important are you to the business?
• Other investors’ requirements; how will stakeholders react?
•
‘Drag’ and ‘tag along’
•
Professional advice
•
Valuation, tax and corporate structure
• Due diligence – ‘getting your house in order’
2
Legal due diligence (1)
• Who owns ‘your’ intellectual property?
• Domain names and Social media accounts
•
Software and other IP licences
•
IT Systems
•
Borrowings and other financing
•
Company records and registers
3
Legal due diligence (2)
•
Customer and supplier contracts and key relationships
•
‘Change of control’ clauses
•
Regulatory requirements, licensing
•
Employment and consultancy contracts, retention of staff
• Minority shareholders
•
Exercise of share options
• Data rooms
•
Confidentiality
4
What are a Buyer’s requirements (1)?
•
Likely acquisition objectives?
•
Type of Buyer
•
Type of Deal
•
Acquiring products, knowhow/IP, access to market, supply chain; remove competitor?
• Do they need you?
• Minority and unwilling shareholders
• Due diligence
5
What are a Buyer’s requirements (2)?
• Warranties and indemnities; who will give these?
•
Restrictive (non-compete) covenants; will these affect your future plans?
• Non-cash ‘consideration’ and rollovers; or do you just want cash?
• Deferred consideration and ‘earn outs’; or do you want everything on ‘day one’?
•
Put and call options; or do you want to sell all your shares now?
•
Listings / IPOs
•
Retention / removal of staff; incentives and termination payments
•
Repayment of borrowings, release of security
6
Chester
Tel: 01244 405555
Shrewsbury
Tel: 01743 443043
Manchester
Tel: 0844 800 8346
Offices
Aaronandpartners.com
@AaronLegal
Presentation to Techcelerate, 29 April 2022
Stuart Scott-Goldstone, MA MBA
Partner and Head of Corporate/Commercial Team
Aaron & Partners LLP
t: 07812 172567
e: stuart.scott-goldstone@aaronandpartners.com
w: aaronandpartners.com
Initial considerations
• What are your objectives?
•
Realisation of investment, new role, new challenges or taking a break/retirement?
• How important are you to the business?
• Other investors’ requirements; how will stakeholders react?
•
‘Drag’ and ‘tag along’
•
Professional advice
•
Valuation, tax and corporate structure
• Due diligence – ‘getting your house in order’
2
Legal due diligence (1)
• Who owns ‘your’ intellectual property?
• Domain names and Social media accounts
•
Software and other IP licences
•
IT Systems
•
Borrowings and other financing
•
Company records and registers
3
Legal due diligence (2)
•
Customer and supplier contracts and key relationships
•
‘Change of control’ clauses
•
Regulatory requirements, licensing
•
Employment and consultancy contracts, retention of staff
• Minority shareholders
•
Exercise of share options
• Data rooms
•
Confidentiality
4
What are a Buyer’s requirements (1)?
•
Likely acquisition objectives?
•
Type of Buyer
•
Type of Deal
•
Acquiring products, knowhow/IP, access to market, supply chain; remove competitor?
• Do they need you?
• Minority and unwilling shareholders
• Due diligence
5
What are a Buyer’s requirements (2)?
• Warranties and indemnities; who will give these?
•
Restrictive (non-compete) covenants; will these affect your future plans?
• Non-cash ‘consideration’ and rollovers; or do you just want cash?
• Deferred consideration and ‘earn outs’; or do you want everything on ‘day one’?
•
Put and call options; or do you want to sell all your shares now?
•
Listings / IPOs
•
Retention / removal of staff; incentives and termination payments
•
Repayment of borrowings, release of security
6
Chester
Tel: 01244 405555
Shrewsbury
Tel: 01743 443043
Manchester
Tel: 0844 800 8346
Offices
Aaronandpartners.com
@AaronLegal