Esade Alumni and Roca Junyent advise enterpreneurs on how to ensure a successful round of financing
23 October, 2014
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Jaime Escamilla, CEO and co-founder of Aparca&Go, and Michele Marino, CEO and co-founder of Mobile Media Content, explained the difficulties they faced while attempting to secure financing and negotiate and close out their shareholder agreements.
Yesterday saw Esade Alumni and Roca Junyent stage a joint workshop titled “Ensuring a successful round of financing” with the aim of addressing the difficulties these processes pose for entrepreneurs and sharing a few secrets on how to successfully close out these arrangements.
The speakers were quick to point out that rounds of financing are complex affairs. They typically start with a potential investor showing interest in the start-up and discussing the value of the business, the contribution they are willing to make and their resulting share in the company, and conclude with the investment and the signing of the shareholder agreement. On this subject, Fede Segura, partner at Roca Junyent and an expert in corporate law, explained that “entrepreneurs are often so busy focusing on their core business that they simply don’t have the time, resources and experience that investors have (family offices, business capital and private equity) to be able to negotiate with equal bargaining power”.
Manuel Silva, public prosecutor and partner at Roca Junyent, opened the event with an overview of the state of company financing in Spain and the current progress being made as new legislation on corporate financing passes through Parliament.
Jaime Escamilla, CEO and co-founder of Aparca&Go, and Michele Marino, CEO and co-founder of Mobile Media Content –two entrepreneurs with first-hand experience in successful financing rounds and shareholder agreements– shared their experience with the audience and pointed out the mistakes they made and the obstacles they ran up against. Escamilla, for example, explained how not having a shareholder agreement at the outset proved to be a drawback when negotiating with business angels. He also stressed the importance of establishing the voting and economic rights of shareholders, including aspects such as the workings of general shareholders meetings, the voting system and the remuneration of the entrepreneurs running the business.
Michele Marino, CEO and co-founder of Mobile Media Content, was at pains to point out just how tough the search for funding can be. She explained that one of the secrets behind the success of her technological start-up –which provides 3-D ticketing– in closing out its first financing round was the fact that her company was already a going concern, with turnover and contracts with important customers, including Athletic de Bilbao and RCD Espanyol football clubs.
Fede Segura brought the event to a close by giving the audience of budding entrepreneurs some advice on dealing with financing rounds and negotiating shareholder agreements, pointing out how important it is for investors to have a specified length of stay and a no-competition clause in effect with the entrepreneurs themselves. The lawyer also drew the audience’s attention to the importance of drag-along clauses in shareholder agreements,governing disinvestment in the company and the potential departure of shareholders. This means that if and when a third party attempts to buy out the company by acquiring all its share capital, a shareholder with a drag-along right can effectively force the remaining shareholders to sell their stakes as well to the buyer.
About Roca Junyent
Roca Junyent is one of Spain’s leading law firms. It employs over 230 professionals and operates both in Spain and abroad through its offices in Barcelona, Madrid, Palma de Mallorca, Lleida, Girona and Shanghai and through partnerships with top-tier law firms outside Spain. The firm and several of its fee earners have been singled out by the most prestigious legal publications, including Chambers, Legal 500 and Best Lawyer International.