Practice/Industry Group Overview
Edwards Wildman lawyers have been involved in the formation of a variety of debt or equity focused venture capital and private equity funds dating back to the 1970’s. Our experience ranges from the representation of first-time or experienced general partners raising funds to reviewing and negotiating dozens of fund partnership agreements on behalf of institutional limited partners. Our fund clients are located across the United States, in Canada, and in Europe.
We represent equity and debt funds of various kinds, including buy-out funds, growth capital funds, venture funds, seed or angel capital funds, energy funds, real estate funds, funds which invest in “bank” debt, mezzanine and second-lien debt, distressed debt or hybrid securities, and funds-of-funds.
Our lawyers know the private equity and venture capital business, not only from a fund-to-portfolio company perspective, but also from a fund-to-limited partner one. Because of that, we are thoroughly familiar with issues of special concern to fund managers and limited partners, including UBTI sensitivity, ECI issues, SBIC issues, and cross-border deal structuring considerations.
We have been involved in the full range of external issues affecting private equity and venture capital funds, whether equity-focused or debt-focused, including: formation, administration and investment issues; analyzing market trends, issues and strategies; developing appropriate US and cross-border fund structures; securities law consulting (including insider trading); preparing appropriate offering materials; negotiating with potential investors; preparing partnership, LLC and other appropriate agreements; and closing the fund. In addition, we provide guidance to our fund clients on such complex issues as clawbacks, reductions in fund size, FOIA, investor defaults, and litigation.
We advise our fund clients on a wide range of internal issues as well, including designing and implementing appropriate compensation and vesting arrangements (and handling the complex securities and tax issues these arrangements present), addressing management and control issues, designing and implementing appropriate structures to allow investment professionals to use management fees to fund capital commitment obligations, and advising fund managers on complex GP separation issues.
We understand that the work does not stop when the fund has been formed, that’s why our lawyers address the ongoing needs of our clients. Operations and compliance issues are a significant factor in any fund. Our lawyers follow an interdisciplinary approach, drawing upon the experience of lawyers within our corporate, litigation, tax, ERISA, intellectual property, and other departments to provide business-oriented advice and solutions for our clients. This combined experience creates an environment in which general partners and limited partners can be confident that regulatory concerns will be addressed and pitfalls avoided. We work with investment professionals to establish compliance programs under applicable federal and state laws and establish guidelines to comply with the provisions of the limited partnership agreement and other fund documentation. We help investment professionals address potential conflict of interest and fiduciary duty issues that can arise when setting up multiple investment vehicles with differing investment objectives. Our experience with the problems and pitfalls that can occur over the life of a fund is evident in the advice that we give our fund clients when structuring new funds, and preparing and negotiating limited partnership agreements and other fund documentation.
We Know The Market
The private equity and venture capital market is dynamic and constantly evolving. In addition to our experience representing general partners and limited partners, our status as sole sponsor of Private Equity Terms & Conditions, published by The Private Equity Analyst, speaks to our keen interest in staying abreast of “what is market” in the area of fund raising. That question has become particularly important as an unprecedented number of venture capital and private equity funds prepare to raise new funds in an uncertain investment climate. Our experience, market knowledge, and business insight allow us to provide our clients with unsurpassed service during all phases of their fund formation project.