BGBG

Raising Investment

Does your company need to raise capital in order to grow? Are you investment ready?

Does your company need to raise capital in order to grow? Are you investment ready?

It is unlikely that you are going to be able to grow your company without external finance of some sort. It may be that you have started your company with your savings, borrowings secured on your home, or money lent to you by family and friends.

Raising investment to further develop a product or service may be required. It may be that you need to fund capital equipment, or your business may be established and growing and you need to fund working capital. Perhaps you need to acquire more stock, or you need to fund work in progress and book debts.

Alternatively, you may be looking at raising investment to make an acquisition or enter new markets, and to do so out of trading cash flow could be too slow in rapidly changing markets.

For more information

Please do not hesitate to contact an Everyman Legal Solicitor on 01993 893620 for a free discussion or email nicola.blackford@everymanlegal.com

So what are the alternatives?

Debt Finance

This has the great advantage of not diluting your equity holding. The lender may though want a personal guarantee from you and insist that this is secured against your home. The lender may also want a charge over the Company’s assets and a Debenture including a floating charge. This would allow the lender to take control if your Company is in default by appointing an administrator.

Equity Finance – Ordinary Share Capital

This method of raising capital gives the investor the upside reward if things go well. Equally, he has the biggest risk if things do not go to plan. The investor will only have their money returned on an insolvency if all secured and unsecured creditors have been paid in full. There are however many forms of capital in the spectrum of debt to equity.

Equity Finance – Preference Share Capital

This sits between debt and ordinary share capital. It can only be repaid out of future profits or a prescribed return of capital where the interests of creditors are protected. Ordinary shares can also be issued with preferred rights giving, for example, the first share of any dividends or proceeds of sale if your Company is sold.

We can talk through the possibilities for raising capital finance with you, and can provide legal advice on: –

  • How best to structure business angel finance;
  • Regulatory issues on financial promotions;
  • The exemption for self-certified high net worth investors;
  • Business angel investment including on Articles of Association & Shareholders’ Agreements;
  • The terms of loan agreements; and
  • Shareholder disputes and what happens when things go wrong

Our dedicated team of solicitors, based in Witney, Oxfordshire, would be happy to answer your questions.

Contact Us

The first striking thing about Everyman Legal was that the team are very affable and very human - not boring lawyers! They were warm & sincere and I felt confident from the start that they were technically excellent.