Private Equity & Venture Capital

Herrington Carmichael is a full service law firm offering legal advice to UK and international businesses as well as individuals and families.
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Private Equity & Venture Capital

Meet our experts

Dedicated professionals ready to assist you.

Sophie Protheroe PNG
Sophie Protheroe
Senior Solicitor, Corporate
Chris-Gemson-PNG
Chris Gemson
Partner, Corporate
Yavan-Brar-PNG
Yavan Brar
Chief Executive Officer

Private Equity and Venture Capital firms often have strict rules that companies need to adhere to if they want to take investment and so the drafting of the legal documents is complex and comprehensive work. Herrington Carmichael has a large team of lawyers who have expertise in dealing with private equity firms and venture capital funds.

Our expertise extends to navigating the intricate regulatory landscape for private equity and venture capital houses and their investors. We assist in establishing tax-efficient funds, collaborating with tax advisers to devise structures that align with contemporary practices in private equity.

In the UK, Private Equity (PE) and Venture Capital (VC) investments necessitate careful consideration of various regulatory factors to ensure adherence to local laws and regulations. Consideration of these UK-specific regulatory factors is crucial for successful PE and VC investments, especially when engaging with entities like NS&I. Collaborating with legal professionals well-versed in the UK regulatory landscape is essential to navigate these complexities effectively. Here at Herrington Carmichael, we have the necessary skills and experience to assist you completing these types of transactions successfully and efficiently.

Key contact

Sarah-Jervis-PNG
Sarah Jervis
Solicitor, Private Wealth & Inheritance

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Frequently Asked Questions

Find answers to your most pressing questions about our services and processes.

Funding from a private equity or venture capital investor will always be conditional upon their taking an equity stake in the company. The provision of funds can come with access to stronger management and opportunities to maximise expertise and grow the business itself. The key advantage compared to debt is that the other shareholders are not liable to repay the investor in the event that the company is not profitable and their return will generally be limited to the exit proceeds which are available. Please get in touch if you are considering funding options.

Some of the key legal issues include:

  • Extensive due diligence from the investor firm
  • Structure of equity provisions dealing with dividends, preference shares, capital returns, controls and voting rights
  • Whether warranties and disclosures are required
  • Structure of the consideration to be paid

The nature of the controls will depend on the nature of the business and the amount of investment. Generally, investment funds will require a seat on the board of directors as well as negative controls on the company issuing new shares, altering the share rights, making any constitutional changes, limiting the amount of debt or liability the company can incur. In order to monitor the specific controls an investment fund will require, there are often many information obligations and a detailed business plan which will need to be adhered to.

Most private equity or venture capital firms will insist upon a shareholder or investment agreement setting out the relationship between the parties and any controls they want to instil on running the company. As the articles of association are a public document, it will be appropriate to include certain provisions in the separate investment agreement, such as warranties on the current position of the target, mechanisms for warranty claims and limitations on such claims. Please get in touch to find out more.

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