Investors and investments can take many forms.
At its most basic, an investment is where a person commits money to a company with the expectation of receiving a benefit in the future – either through additional income or a profit on the money which has been invested.
Investment may come from:
- An angel investor – an individual who provides money to a company in return for shares or convertible debts in that company. Angel investors typically support start-up companies.
- Crowdfunding – crowdfunding is where money is raised by a company, usually to fund a specific project, through small amounts invested by a large number of people, typically through an online crowdfunding platform.
- Private equity – investment funds created by pooling together money from a number of accredited investors which look to invest into private Private equity investment firms often look to invest in “mature companies”.
- Venture capital – venture capital is a type of private equity which focusses on start-up, emerging and often tech-focused companies which they have identified as having the potential for rapid and long-term growth.
Sometimes investment can be a combination of the above sources together with other sources of funding such as bank borrowings.
The investment itself will generally depend on:
- the company and the strength of its proposition;
- how much the company is looking to fundraise;
- how much equity it is prepared to give away in return for investment;
- what the company is proposing to use the investment money for;
- the anticipated rate of return of any investment; and
- the investors’ appetite for risk.
How we can help
Any investment is a gamble and there are no guaranteed returns.
How the investment is to be made and what is offered in return should be considered carefully.
In seeking an investment, a business will often give promises and assurances as to profitability, but unless these promises are being backed up with protections, many investors can learn the hard way that the value of any investment can go down as well as up.
All investors are taking a risk with their money. Undertaking the appropriate initial due diligence into the company and having the relevant protections in an investment agreement are key in trying to minimise that risk.
At the same time, a company’s existing owners will need to ensure that they are comfortable with what is being given away in terms of ownership and control, that it is of the right value and for the right reasons.
Obtaining the right funding at the right time can be crucial to a business’ success. Our Corporate and Commercial Lawyers have a wealth of experience in providing advice on the investment process to a wide range of investors as well as companies looking to secure funding to take their business to the next level.
Our recent work includes:
- Advising a drinks manufacturer on the terms of its most recent fundraising round, including advising on the terms of convertible debt instruments.
- Acting for an angel investor in his investment into a start-up, carbon neutral passenger transportation company.
- Advising the operator of a fitness focussed franchise network on its successful crowdfunding raise through a well-known online crowdfunding platform.
- Acting for an internationally renowned confectionery business on the terms of its fundraising from a Cambridge based private equity group.
- Advising a smart doorbell designer and manufacturer on the terms of investment from a group of individual high net worth investors.
- Advising an early stages technology company on its successful crowdfunding raise through an online crowdfunding platform.
- Advising the sellers of a company in a private equity backed buy-out where they retained an equity interest.
Contact our specialist Investment Solicitors in East Anglia
For practical investment advice, as well as any other business legal advice you need to reach your goals, get in touch with our specialist Investment Lawyers in Cambridge, Bury St Edmunds, Ipswich and Norwich.
To set up an initial consultation:
- Give us a call on 0330 404 0767; or
- Fill in our simple online enquiry form and we will be in touch shortly.