The company has created a new legal framework for financial technology firm Growth Capital Ventures to give investors of all sizes uniform rights and protection, while also making it easier for entrepreneurs to tap into the opportunities of alternative finance.
Growth Capital Ventures operates online peer-to-peer and equity crowdfunding platforms that link entrepreneurs and high growth businesses with a range of investor types including venture capitalists, experienced angel investors and smaller investors via its crowdfunding arm GrowthFunders.
With such a diverse mix of investors, driven in part by the rapid emergence of equity crowdfunding, the firm recognised the need to create a level playing field for investors of all size.
It enlisted Teesside-based Endeavour Partnership to develop a suite of standardised legal documents to facilitate co-investment and syndication between the various different types of investor using its platforms. While striking a balance between investor and entrepreneur needs, the documents also had to adhere to guidelines set out by the Financial Conduct Authority, which directly authorises Growth Capital Ventures.
The documents are designed to give smaller investors the same grade protections as their larger, more experienced counterparts. As well as enabling smaller investors to contribute follow-on investment to growing businesses.
The documents also give smaller investors the right to be involved in shareholder votes, giving them a voice without holding the business back, should they not wish to be actively involved.
They are also aimed at striking a fair balance between entrepreneurs and investors and ensuring that business leaders can operate without the hindrance of over-interference from investors.
Craig Peterson, director of London and County Durham-based Growth Capital Ventures, said: “Having previously only worked with big city law firms, it’s fantastic to have found a legal partner on our doorstep with the capacity and expertise to handle such a complex assignment. The firm’s commitment to developing relationships and its realistic cost structure are what really set it apart from the competition. Endeavour are a valued strategic partner and will provide legal support on all equity investments made through our GrowthFunders platform.”
Fellow director Norman Peterson added: “This was a complex piece of work which Endeavour has simplified and delivered extremely well. It’s important that we have a legal structure that makes it easy for the businesses raising capital to minimise legal costs and manage a large shareholder base of smaller investors effectively. The corporate and commercial team at Endeavour have excellent knowledge of the Venture Capital and rapidly growing Alternative Finance Sector. We look forward to the firm supporting us in a proactive manner as the market we’re in continues to mature.”
Nik Tunley, partner at Endeavour, said: “This was an interesting piece of work for Endeavour. We have an experienced corporate and commercial team and it’s good to support an innovative ‘Fintech’ business like Growth Capital Ventures. We are looking forward to working together on some exciting deals as over the next few years”.
As well as its strong corporate and commercial sector, Endeavour Partnership also advises regional, national and global businesses on a range of legal matters including, company litigation, commercial property, employment and corporate recovery and insolvency.
Other services, which span corporate and commercial law and cover both the private and public sectors, include company formation, banking and finance, company secretarial, mergers and acquisitions and employment issues.
For more information visit www.endeavourpartnership.com.