Venture Capital

At Anderson Strathern, our venture capital experts advise some of Scotland’s best known businesses and most active investors – from institutional investors to angel syndicates, family offices and high net worth individuals to universities and investment arms of large corporates. We recognise how important investors are to Scottish businesses and to the wider UK economy, and we can provide a full suite of services to assist throughout each stage of the venture capital process.

Our experts have significant experience advising companies seeking investment, management teams and a wide variety of investors in relation to all types of investment deals, with a team specialising specifically in venture capital.

Regularly advising investors also allows us to help potential investee companies ensure they are “investment-ready” from a practical, commercial, and strategic perspective – well in advance of the actual heads, diligence and documentation phases.

Our extensive experience brings commercial advantage to negotiation of the heads of terms – and, when it comes to the legal documentation, we ensure that our clients get the deals they want and need – ensuring it is properly tailored to their needs (one size doesn’t fit all).

Our aim is to always guide you toward the path that is right for you, and we take great pride in seeing our clients prosper.

Speak to our venture capital solicitors today

To discuss your requirements with a member of our expert commercial law team, please get in touch today.

Contact us on 0131 270 7700, visit our offices in Edinburgh, Glasgow, East Lothian or Shetland, or fill in our enquiry form at the bottom of the page to request a call back.

What is venture capital?

Put simply, venture capital is a type of private equity and investment that private investors elect to provide to start-up companies and small businesses that demonstrate signs of long-term growth potential.

It’s important to note that, while monetary investment is generally a preferred approach, this isn’t necessarily the only option available to investors. It’s also possible to provide venture capital funding through technical or managerial expertise.

There have been a number of examples of now global businesses which began life with venture capital funding, with UK examples including Moonpig and Skyscanner. Even the likes of Google and Facebook received venture capital backing during their infancy.

Why would a business need to raise venture capital?

There are a number of possible reasons why a start-up business would require investment via venture capital funding. Of course, this will differ for each individual company, but the likely reasons will include:

• Needing money to grow capacity
• Meeting existing or projected demand
• Funds required to develop different aspects of the business, such as marketing
• Enhance product development
• Hire new staff
• Restructuring the business as a whole
• Outside business expertise and contacts

Why act as a venture capitalist?

There is a risk to acting as a venture capitalist. As you’ll likely be aware, not all start-up businesses are successful, which means that there is a potential that an early investor could lose the money they invest.

So, what are the benefits of acting as a venture capitalist? Well, as you may expect, much of this centres on the potential returns. A relatively small investment could make a major difference to a small business, which means if there is clear growth potential, the returns could be substantial.

How does venture capital differ from private equity?

Venture capital is occasionally confused with private equity. While venture capital is a form of private equity, the main difference between these two forms of investment depends on the type of business that receives the investment.

In basic terms, private equity is typically where a group of investors focus on a business that is already past the growth stage and is well established. The company in question will often be struggling or failing to make the profits they are projected to.

Is there a difference between a venture capitalist and a business angel?

Both venture capitalists and business angels provide equity capital to start-ups and expanding businesses, but there are a few important differences to be aware of.

Generally speaking, venture capitalists are investing institutions, such as an insurance company or pension fund, which make an investment on behalf of other people.

A business angel, on the other hand, is a private individual seeking to invest a lump sum on their own behalf, often with the view to also offering non-monetary contributions, such as management or marketing guidance.

Our expertise with venture capital

Advising start-ups and businesses looking for investment

Our venture capital solicitors have substantial expertise and experience in working alongside start-ups who are seeking to find investment via venture capital or who require carefully tailored legal advice after being approached by a venture capitalist.

We can work to ensure that your business is ready for investment from both a commercial and strategic perspective, as well as advise you on the legal liabilities you are likely to face after agreeing to receive investment.

We can also work to ensure that you understand exactly how venture capital is likely to affect your operations, both in the short-term and long-term, helping you to agree to a deal that encourages growth, while also protecting your best interests.

Advising investors

Providing venture capital funding is a risky yet rewarding investment, so it should go without saying that seeking legal advice is essential before you put anything on the table – whether that inlcudes money or other forms of investment.

Our venture capital solicitors can advise with all types of investment, working alongside you to lay out the potential risks and rewards of investment, making sure that thorough due diligence is carried out before any further action is taken.

We can also advise you in relation to exiting a company after successfully investing, whether that’s through methods such as a merger, acquisition, or initial public offering.

Resolving venture capital disputes

During the course of business, disputes can unfortunately arise. Where this occurs in relation to venture capital, plenty is at stake, which is why it’s essential to find a swift resolution.

In these situations, we can enlist the support of our expert commercial litigation team, who can advise on the most appropriate course of action, reducing the potential for any unnecessary conflict wherever possible.

Why choose our venture capital solicitors?

At Anderson Strathern, we have a team of dedicated corporate law specialists with substantial experience in supporting a wide range of clients with venture capital, using our wealth of combined expertise and experience to support businesses operating in a range of different sectors, all with their own set of commercial goals.

Our corporate team comprises of members who have been recognised for their skills and expertise in the independent legal directories the Legal 500 and Chambers & Partners and who hold various professional memberships.

We also have various other corporate specialities, including corporate restructuring, private equity, joint ventures, mergers and acquisitions and employee ownership trusts. To find out more about our corporate law expertise, please click here.

Speak to our venture capital solicitors today

To discuss your requirements with a member of our expert commercial law team, please get in touch today.

Contact us on 0131 270 7700, visit our offices in Edinburgh, Glasgow, East Lothian or Shetland, or fill in our enquiry form at the bottom of the page to request a call back.