Tech start ups – some legal thoughts by thomas colmer at guru program spring 2014

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Thomas Colmer has strong interest and experience in Financial Services, FinTech, Payments, Health IT, Security Software, AdTech and Life Sciences & Healthcare. He has a unique perspective from industry and deal experience in what works and what to look out for as well as excellent links into VCs.

Published in: Business, Economy & Finance
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Tech start ups – some legal thoughts by thomas colmer at guru program spring 2014

  1. 1. Tech Start Ups – some legal thoughts 27 May 2014
  2. 2. osborneclarke.com Tech start up funding considerations • LLP – taxed transparent partnership (cf. PAYE, NIC), 2 (designated) members, limited liability, no capital maintenance, no formal constitution/disclosure at CH • VDR – organisation, eye on ball vs prize • Equity/debt – convertible? security? redeemable? conversion? • Liquidation preference – sale/exit, ?x, catch up? cap? • Anti-dilution – full/weighted average? pay to play? • Exit – intentions? 2
  3. 3. osborneclarke.com Tech start up funding considerations • Warranties, disclosure, limitations • Board – right to appoint? observer? growth? chair's casting vote? quorum frustration? committees e.g remcom? indemnification, D&O • Information – who? what? frequency? • Business – what? budget/business plan? name? IP? • Negative and Positive covenants – Insurance? Auditor? compliance generally • Consent rights – threshold? board/investor? share capital, constitution, funding, M&A, indebtedness, encumbrances, finance leases, guarantees, capex (growth de mimimis?), key staff, non- ordinary course and related party transactions 3
  4. 4. osborneclarke.com Tech start up funding considerations • Restrictive covenants – who? what? competition, solicitation (suppliers, customers, staff), confidential information, duration? • Options – tax, schemes, valuation, dilution, cap table • Transfer - pre-emption (for all?), deeds of adherence, compulsory, restrictions • Good/Bad leavers – full value? vesting? death? family? Intra-group? market value? valuation • Drag-along - %? • Tag-along - %? • Dividends – policy? distributable reserves? (cumulative) preference? • Other issues - registration rights, EIS/VCT clearance, etc. 4
  5. 5. Questions? Thanks - Please get in touch Thomas Colmer Osborne Clarke Thomas.Colmer@osborneclarke.com T +44 20 7105 7276 M +44 7887 691 541 Thomas.Colmer@osborneclarke.com Thomas.Colmer@osborneclarke.com clarke.com [insert photo here] Height = 5.39cm Width = 5.81cm
  6. 6. Questions? Thanks - Please get in touch Thomas Colmer Osborne Clarke Thomas.Colmer@osborneclarke.com T +44 20 7105 7276 M +44 7887 691 541 Thomas.Colmer@osborneclarke.com Thomas.Colmer@osborneclarke.com clarke.com [insert photo here] Height = 5.39cm Width = 5.81cm

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