Equitable Law Advises The Rainbow Seed Fund Upon The Creation Of Its New Segregated Synthetic Biology Portfolio

Equitable Law is delighted to announce the successful completion of its legal advice and assistance to its long established client, the Rainbow Seed Fund in relation to the creation of its new ten million pounds sterling (GBP £10m) segregated 'Synthetic Biology Portfolio'.

Synthetic biology is the design and construction of novel biologically based parts, devices and systems, as well as the redesign of existing natural biological systems for useful purposes.  It has a number of potential applications within the bio-based knowledge economy.  These include: industrial biotechnology, bioenergy, bioprocessing, novel materials and biosensors.

Synthetic biology is one of the eight (8) great technologies highlighted by the UK government as areas of wide-ranging significance and potential economic importance, in which the UK’s research base is particularly strong.

Further details are available at :- http://midven.co.uk/news/midven-to-manage-synthetic-biology-enterprise-fund/

Dr. Andrew Muir, Partner of Midven, the manager of the Rainbow Seed Fund commented - "We are delighted by Equitable Law's assistance with the expansion of the fund by way of the creation of the new portfolio of the fund.  The fund has now trebled in size since Dan Johnson started to assist the Fund and we thank Dan (and his team) for their continued support to the fund".    
 

Christmas 2013 - Chosen Charity - ATLEU - Anti-Trafficking and Labour Exploitation Unit

As is our habitual practise, we will not be sending Christmas cards / greetings this year - but will instead be making a donation to our chosen charity and pro-bono supported organisation, the Anti-Trafficking and Labour Exploitation Unit - atleu.org.uk

ATLEU is a newly established charity providing legal representation to victims of trafficking and labour exploitation. ATLEU assists victims to obtain safety, recovery and redress against their persecutes.  ATLEU delivers a comprehensive and dedicated service to victims helping them find legal solutions to their complex problems.  This includes advising victims on their immigration status and assisting them to apply for asylum or other forms of lawful residence; securing appropriate and safe accommodation, financial support and treatment from local authorities, the Home Office or other statutory bodies; and obtaining compensation from their traffickers or the state.

Guide to Contract Negotiations With Investors - Early Stage Venture Capital Deals

Dear All,

Please feel free to review the annexed:-

http://www.entrepreneurhandbook.co.uk/guide-to-contract-negotiations-with-investors/

The text of which should be :-

Entrepreneurs - Contract Negotiations with Investors

Having found an investor proposing to invest in your business, your attention needs to turn to the documentation that you are likely to need to reflect your agreement.

Firstly – Make sure that you have a clear understanding of the outline terms of investment (prepare a non-legally binding ‘Heads’ or ‘Term(s) Sheet’ - that you both agree with).

At the very least, your investor is going to want to see that their ownership interest (in shares) is properly documented as issued in the investor’s name.  This (in itself) involves a certain amount of paperwork- although it is not unheard of for an investor to subscribe to shares merely on the basis of the broadly standard constitution of an English limited liability company (i.e. the Companies Act’s – ‘Model Articles of Association’).

http://www.companieshouse.gov.uk/about/modelArticles/modelArticles.shtml

However, if your investor is to hold a minority stake, and / or not be ‘hands-on’ (i.e. actively involved on a frequent basis) with the company in which they are investing, it is likely that they will seek some element of agreed investment documentation to protect their interests. 

As a founder of the business - you want their money, such that you may find yourself presented with a ‘take it or leave it’ proposition.

The worst thing you can do in such a situation - is simply accept the terms on offer, particularly if you are not to consider them in any detail (with the aim of seeking to know what you are agreeing to).

Budgeted Legal Review

The problem is that in early-stage / venture capital type investment transactions, the sums of money being invested are generally quite modest and do not leave much of a budget for legal advice on the proposed investment documentation.

Accordingly, an investor’s initial position is generally to resist the founders taking legal advice on investment documentation – largely because it is the investor’s money which directly or indirectly is likely to be paying the legal fees. 

However, as a founder you should seek to persuade the investor that such an attitude is counter-productive, and that it is much better for you to gain a full understanding of (and agree to) the detail of the investment documentation you are proposing entering into - if a sound on-going relationship is to be created between you.  

Lawyers (like many other in service industries) tend to base their charges upon the amount of time which they spend considering and advising upon matters that they are consulted in relation to.  Experienced lawyers should be able to agree with you an (estimated or) budgeted fee for work to be undertaken (in light of what interested parties consider to be sensible for the work). 

Having set your budget for legal review, make sure that you get the maximum value out of the legal advice you receive.  For example if your budget only buys a limited amount of time from your legal adviser, make sure that they take you through the documentation (on a ‘page turn’ basis) so that you fully understand the terms which you are being asked to agree to.  A good adviser should know and have seen the format of such documentation before, know what is reasonable market practice (and what is not), and know the issues which need to be explained to you.  If there are any commercial / legal terms which you have objection to, often the most effective way to resolve the issues is to discuss matters directly between the founder and the investor – with the hope that a compromise position can be found.

As founder you need to be aware that an investor has a range of legitimate protections that they will reasonably require in the documentation (e.g. that their likely minority position will not be abused by your continuing majority control of the company in which they are investing).

Certain other provisions might seem unfair to you at first glance, but with appropriate revisions and careful drafting, you may well be able to accept them.  Falling into this class of provisions might be the well-known "leaver provisions", whereby if a founder were to leave the company at some point in the future, your shares become capable of re-acquisition by the company etc.  The investor will want to know that you will continue to be actively involved in the business – thereby protecting their investment on an on-going basis.  If you cease to be involved in the business in the future, it is arguably fair that you should potentially receive the value which you have created to that point in time, but arguably not that you should be able to continue as a ‘sleeping partner’ in the business.

Having accepted that the investor may well have legitimate reasons for wanting appropriate documentation, interested parties should then aim for the documentation to be drafted and settled efficiently and cost effectively.  Legal documentation (in the writer's opinion) should generally be drafted on a basis of being fair and reasonable. 

Generally, the investor’s lawyers will prepare the documentation (although it is possible for the company to give instructions for the lawyers to prepare what is intended to be market practice documentation - which is intended to assist with the taking of investment, and which are designed to be sensible even-handed documents between the parties).

Generally, the investment documentation will comprise (i) articles of association and (ii) an agreement (often variously described by a combination of the words ‘investment’, ‘subscription’ and/or ‘shareholders’ agreement).

Articles of Association

Every company has articles of association – often comprising the Companies Act’s ‘Model Articles’ (with small amendments), which are generally adopted by default upon incorporation. 

Articles of association can be considered as akin to a ‘club constitution’ – legally comprising a binding agreement between the company and the shareholders from time to time. 

Such a document can be quite impenetrable to a layman – and largely for this reason, in certain early-stage investments, specifically drafted articles of association are not prepared. 

However, if new articles or revisions to the articles of being proposed, you should treat this document as the primary document which you first review. 

Lack of familiarity with articles often means that people choose not to read that document – and for this reason (and the reason that certain share-based rights are more easily enforced through the articles of association) – many of the more onerous provisions in investment arrangements are often included in the articles.

‘Subscription and Shareholders’ Agreement

The other document which is generally utilised as part of the investment arrangements is a separate written agreement – generally a much more accessible document (for those who deal with the same) – and prepared in the format of a private agreement between the founder and the investor (generally with the company also a party).

Model Documentation

The internet has assisted such arrangements in many ways, including the fact that early-stage venture capitalists – and others active in the market - now have easy access to basic documentation which is considered to be market standard.  One example of this is the early-stage venture capital documentation produced by the British Venture Capital Association (B VCA) and which is widely available on the internet : –

http://www.bvca.co.uk/assets/features/show/Modeldocumentsforearlystageinvestments

Before you enter into investment arrangements, it may be useful for you to try and review the articles and the investment agreement at the link above, so that you can understand the type of arrangements which you may be subject to.  Please note however that the documentation set out above is quite detailed and complicated, and there are a number of less accessible but nevertheless widely recognised documentation (often based upon the above documents) that lawyers can easily gain access to.  Use of standard (or recognised) documents greatly assists with a rapid and efficient investment, and hence - one drafting approach is to ensure that a particular set of model documentation is used in preparing drafts and then reviewed by lawyers (with the amendments proposed made to the standard documentation clearly show).  This removes a lot of time from the consideration process, so that the detail can be focused upon by those who review the documentation.

The above review only "scratches the surface" of the subject – but we hope that it gives you an understanding of the process and documentation you are likely to need to be subject to.  If you would like to discuss matters further, please do not hesitate to contact the writer so as to do so.

Dan.Johnson@EquitableLaw.com

Principal & Consultant Business Lawyer

(+44) 07788 537 187         (U.K. Mobile / Cellular Telephone)

Equitable Law is a London based (but nationally and internationally focused) boutique legal consultancy firm, providing the business law advice and assistance services of Mr. Dan Johnson.

To find out more, please visit :- EquitableLaw.com

Pro-Bono Legal Advice to ATLEU

Cubism Law (Dan Johnson & David Buckle) legally advise upon and assist with the initial contractual arrangements of Anti-Trafficking And Labour Exploitation Unit (ATLEU) Limited

Dan Johnson and David Buckle (Consultant Solicitors with Cubism Law) are delighted to announce that as part of their on-going pro-bono legal advice and assistance activities, they have recently legally advised and assisted the Anti-Trafficking And Labour Exploitation Unit (ATLEU) with its initial contractual arrangements (immediately post its formation) - so as to allow the further development of its highly socially responsible activities.

ATLEU is a newly established not-for-profit organisation which will be based (in the short term at), and which will work in association with Islington Law Centre (led by Ms. Ruth Hayes).  ATLEU provides legal representation to victims of people trafficking and labour exploitation.

ATLEU’s founders (Clara Connolly, Jamila Duncan-Bosu, Emmy Gibbs, Victoria Marks and Juliette Nash) have developed specialist expertise in this area of law, arising by virtue of their historic work at North Kensington Law Centre with victims of such oppression and exploitation. 

ATLEU seeks to assist such victims to obtain both (i) safety and (ii) redress against those who have oppressed and exploited them.  ATLEU aims to develop jurisprudence to enhance victims’ rights by taking a strategic approach to litigation and identifying suitable test cases to pursue.  ATLEU provide a comprehensive and dedicated service providing legal advice to victims in immigration and asylum, employment and housing and community care (as well as civil claims for compensation).

ATLEU works closely with all the major agencies supporting victims of people trafficking and labour exploitation and ATLEU accepts both London based and national referrals.  ATLEU work closely with London’s leading chambers that assist clients on a pro bono basis where necessary.  ATLEU has close links with leading city law firms (including Cubism Law) which represent clients pro bono to enforce court and / or tribunal awards.  ATLEU also operate a volunteer scheme and encourage applications from those with relevant experience and an interest in our work.

Islington Law centre was advised in relation to these arrangements by Ms. Harriet Gaillard (and colleagues) at Freshfields Bruckhaus Deringer LLP.

Dan Johnson (Consultant Solicitor with Cubism Law) said: – “The work of ATLEU is a quite different from the general corporate, finance and commercial legal advice and assistance which I habitually provide to clients.  It was enlightening for me to more fully understand that in one of the richest cities in the world and in a developed world economy, numerous people are working in conditions akin to that of slavery”.

Jamila Duncan-Bosu (Founder of ATLEU) said: – “It was a pleasure to be introduced to Dan Johnson (by David Buckle) and to work with Dan, who provided timely, appropriate and highly constructive legal advice and assistance to us at a very busy time.  We look forward to calling upon (David and) Dan’s further legal services in the future - as and when ATLEU may require them”.

More information with regard to Dan Johnson may be found at: – www.linkedin.com/in/danrjohnson

More information with regard to David Buckle may be found at: – www.linkedin.com/in/davidbuckle1

More information with regard to Cubism Law may be found at: – www Cubismlaw.com

116 – 118 Chancery Lane

London 

WC2A 1PP

 

Tel.  +44 (0)20 7831 0101

Fax. +44 (0)20 7831 0001

More information with regard to ATLEU may be found at: – www.atleu.org.uk

The Anti Trafficking and Labour Exploitation Unit (ATLEU)

Islington Law Centre
232 Hornsey Road
London
N7 7LL

Tel:  +44 (0)20 7700 7311

Fax: +44 (0)20 7700 4315

You can contact any of ATLEU’s caseworkers directly (as follows):-

Clara Connolly:              clarac@islingtonlaw.org.uk

Jamila Duncan-Bosu:     jamilad-b@islingtonlaw.org.uk
Emily-Anna Gibbs:        emily-annag@islingtonlaw.org.uk
Victoria Marks:              victoriam@islingtonlaw.org.uk
Juliette Nash:                julietten@islingtonlaw.org.uk

Legal Issues in Debt Restructuring - Hong Kong - May 2013

Dear All,

My Hong Kong based 'Legal Issues in Debt Restructuring' course dates are now confirmed as 6th - 8th May 2013 :-

http://www.euromoneytraining.com/Course/5162/Legal-Training-Asia/CourseInfo.html

I look forward to seeing you 'there and then'.

Kind Regards, Dan Johnson - +1 646 470 1880 (Global Roaming Telephone and Messaging Service)