Venture and Growth Capital Investments in Private Companies
When a non-public company considers its options for attracting new investment to finance growth, new business opportunities or reapportionment of debt and equity balances, it will usually find itself dealing with private equity investors of various kinds: venture capital groups, growth capital firms, or firms that specialize in buyout opportunities or the acquisition of significant control in the issuing company.
Gottbetter & Partners, LLP, can represent any party in a private equity transaction, but our first instinct is to advocate for the interests of the company seeking new investment. Our familiarity with the business considerations that motivate each side of a private equity deal helps us serve effectively as strategists and negotiators as well as facilitators of unregistered debt or equity securities issues.
In most situations, the challenge for the private company seeking new investment is to acquire it on terms that will not lead to a leveraged buyout, significant change in management or excessive dilution of the current equity group's interests. Our goal as lawyers for the company is to maximize its access to new capital without conceding too much to the new investors.
Representing Companies in Negotiations With Private Equity Funds
One way to protect the company's interest is to choose the proposed lead investors with care. Some private equity firms specialize in growth capital, which generally preserves to a greater extent the current structure and management of the company seeking capital. Early or late-stage venture capital firms will also be likely to depend on the vision and innovative ability of current management to deliver a strong return on the investment. Investors known to specialize in buyout opportunities, however, can be expected to look for eventual if not immediate control of the target company.
G&P's experience with the range of possibilities not only for private equity contributions but also for taking a private company public can expand the ways a target company can protect its interests in the negotiation of a new capital contribution. The investor stands to benefit as well from the prospect of a freely trading market in a company's equity securities after it goes public.
To find out more about our attorneys' ability to integrate solid industry experience into sound legal advice, contact Gottbetter & Partners in New York City.
