Business

This last week has been a whirlwind including trips to Scottsdale, AZ and Newport Beach, CA.  I first attended an ABA private equity conference in Scottsdale.  The focus was on securities regulations for exempt offerings.  Sounds boring, I know, and parts of it definitely were.  But this area of law is the foundation underlying my partnership with clients in their strategic growth and capital phases. 

Raising capital is both an art and science.  The art is in the structuring of capital strategies, tuning business models and presenting to investors.  The science is in the law. 

Regulation D and other exempt filing areas are very unforgiving and a constantly shifting area of business law.  Not following the strict procedures of offering processes and filing procedures can result in damages ranging from investors’ right to recession on investment to criminal actions for securities fraud.  The risks are too great to rely on assumptions, and the process itself really is not that difficult to follow - if you know what you are doing. 

This is an area of business law that most business owners don’t fully understand.  Thus, they rely on their attorneys for direction.  Unfortunately, I think a lot of attorneys take advantage of business owners in exempt securities transactions.  I have seen clients pay $20k or more in legal fees for attorneys to merely draft private placement memorandums and operating agreements.  Drafting is the easy part (and should seldom be so expensive).  A good business law/securities law attorney should get dirty in the more difficult aspects of private equity, helping in the capital structuring, business modeling and investor offering processes. 

After Scottsdale I flew to Newport Beach.  The CA leg of the trip served two purposes.  First, I visited with a client on Monday who is about three months into a merger.  The business doubled in size following the merger closing and is going through the cultural growth pains that companies often face after a merger or acquisition.  M&A deals have three components: Financial, Legal and Cultural.  The first two are squared away in deal documents.  The final is handled through good, old-fashion business leadership. 

I then met a SaaS business client on Tuesday for two strategic investor meetings.  The meetings went well.  The client recently issued a PPM, and I am very hopeful that we will have this client’s business funded soon. 

The week was crazy, but it proved beneficial.  That said, I am looking forward to being back in Indy.