Starting a technology business

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Ted Dewhurst workshop

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Starting a technology business

  1. 1. Starting a technology business (the boring bits....) CUTEC, 14 December 2011 Ted Dewhurst, Kesteven Law
  2. 2. Starting a technology business• About Kesteven• Incorporating a company and company names• Directors and shareholders• Shares and shareholders’ agreements• Raising funds• Intellectual Property• Q&A
  3. 3. About Kesteven• Start-up, founded in June 2010• Expertise from city private practice and in- house with VCs (Accel, Balderton)• Focus on needs of technology start-ups• Flexible and entrepreneurial approach• Fixed fees
  4. 4. Why incorporate?• Limited liability• Tax advantages• Company is a “legal person” – independent• Ownership and management can be split• Gives the impression of substance• Not expensive
  5. 5. Company names• Some restrictions on names• Cannot register a name already in use• Certain kinds of words / names restricted• Registration of a particular company name does not by itself create protection• Can use a separate “business name”• Be careful about IP infringement
  6. 6. Articles of association• General rules which govern the running of the company and describe share rights• Can adopt the “Model Articles” or create bespoke articles• Articles can be changed at any time
  7. 7. Directors and shareholders• Directors manage the company on a day to day basis• Shareholders own the company• Shareholders and directors can be different people• Directors’ duties – Companies Act 2006
  8. 8. About shares• Can have several classes of shares with different rights in relation to e.g. – Capital – Income – Voting• Transferring shares• Share options and warrants
  9. 9. Shareholders’ agreements• What are they?• What are they used for?• Very versatile• Need to be considered alongside Articles
  10. 10. Raising funds• Debt v “Equity”• Secured and unsecured debt• Convertible debt• Government funding and grants• Sources of equity funding – Friends and family – Business angels – Venture capital funds / corporate venturing
  11. 11. Equity investment• Terms depend upon type of investor• VC investment terms generally toughest, e.g. – Liquidation preference – Fixed dividend rights – Consent rights – Information rights – Board appointment rights – Restrictions on share transfers
  12. 12. About Intellectual Property• Registrable IP (e.g. patents, trade marks)• Non registrable (e.g. copyright)• Valuable / unique IP should be protected where possible• All IP should be registered in company name• IP and employees / consultants• Confidential information
  13. 13. Sources of information• Companies House website (www.companieshouse.gov.uk)• Business Link website (www.businesslink.gov.uk)• Intellectual Property Office (www.ipo.gov.uk)• HMRC website (www.hmrc.gov.uk/startingup)
  14. 14. Questions ©Kesteven Law LimitedE: info@kestevenlaw.com ■ T: 01223 208855 ■ W: www.kestevenlaw.comKesteven Law Limited is authorised and regulated by the Solicitors Regulation Authority NOTE: The information contained in this presentation is not, and is not a substitute for legal advice

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