Case study · Equity & deal-making
Pre-seed money in. Control stays with the founder.
A founder launching an online information products business needed outside capital without handing over a say in how the business is run. We built a dedicated vehicle, separated it from their consultancy and agency work, and wrote an investment deal where the investor is financially protected and operationally passive.
- Pre-seed
- External capital into a brand-new venture
- Passive
- Investor economics without a board or exec role
- Ring-fenced
- New company separated from legacy consultancy
- Protected
- Anti-dilution consents and enhanced confidentiality
The risk
Outside money, undefined terms.
Taking investment into a business that sits alongside existing consultancy and agency activity blurs what the investor actually bought. Without a dedicated vehicle, legacy work, clients and liabilities get pulled into the deal.
And without written rights, a passive investor can drift into management, or find their stake diluted on the next raise. Both outcomes end the same way: a dispute nobody planned for.
Before
Where the founder started
Structure
- New venture mixed in with an existing consultancy and agency
- No clean vehicle for an investor to put money into
Investor position
- Economic rights undefined
- No clarity on whether investment bought influence or just return
Dilution
- No consent rights over future share issues
- Investor stake could be watered down at will
Governance
- No reserved matters or decision-making process
- Authority undefined
Confidentiality
- Sensitive personal and commercial information unprotected
- No restriction on damaging public statements
Launch readiness
- No privacy or compliance documentation
- Operating model not legally supported
After
Where the structure took it
Structure
- A dedicated company built to receive the investment
- Legacy consultancy and agency activity kept outside the deal
Investor position
- Return tied to dividends, share value growth and exit
- No executive role, no management duties, no board seat
Dilution
- Consent required for changes to the capital structure
- Certainty over how future rounds affect the holding
Governance
- Defined shareholder rights and reserved matters
- Founder retains day-to-day strategic and operational control
Confidentiality
- Bespoke confidentiality and non-disparagement provisions
- Obligations continuing beyond the investment relationship
Launch readiness
- Privacy and compliance documentation in place
- Legal infrastructure for an online information products business
The result
A founder-led growth vehicle.
External capital secured on agreed terms, operational control retained, meaningful economic and shareholder protections given to the investor, governance set from the outset, confidential business and personal information protected — and the new business launched through its own company.
What we did
Structure, rights, governance, confidentiality
The investor contributed capital to the new venture and took defined financial rights: future dividends, growth in the value of their shareholding and a share of any eventual sale. They took no executive role, no day-to-day management responsibility and no board position. Economic participation was deliberately separated from operational control.
We advised on the right corporate structure, established a dedicated vehicle for the investment and kept the new company separate from the founder's existing consultancy and agency work. A bespoke shareholders' agreement was prepared and negotiated, with the constitutional and governance framework aligned to the commercial deal — so the investor was buying into the new business, not unrelated legacy activity.
The documentation dealt with future share issuances, dilution of the investor's percentage holding, consent requirements around changes to the capital structure and shareholder decision-making. The investor wanted assurance that their economic position could not be materially diluted without appropriate consent; the founder wanted room to raise again. The balance was written down rather than left to goodwill.
Defined shareholder rights, reserved or protected matters where appropriate, clear decision-making procedures, controls around changes to ownership and a clean allocation of operational authority. The founder runs the business; the investor holds protection over matters capable of materially affecting the value of their investment.
Enhanced confidentiality was central to the engagement: bespoke confidentiality provisions, restrictions on disclosure of commercially sensitive information, protection covering the founder's personal and business affairs, and restrictions around inappropriate or harmful public statements — applying both during and after the investment relationship.
The investment documents formed part of a wider launch project: privacy documentation, compliance documentation and the legal infrastructure the new operating model needed to trade an online information products business from day one.
For the founder: loss of control after external investment, unrestricted investor involvement, disclosure of sensitive information and reputational damage. For the investor: unexpected dilution, unclear rights, no visibility over significant decisions and uncertainty over the value of the shareholding. For the business: disputes caused by unclear governance, entanglement with legacy activities and thin compliance at launch.
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