This is an interview from our quarterly, community-led publication, The Bundle. Download volume two, issue #1 now to hear from legal leaders at Klarna, Paddle, Form3, and more.
The commercial work for this mammoth project started before Christmas, and took six months end-to-end. The legal process, however, involved 10 weeks of intensive work, from which I learned several valuable lessons.
1. Boring work = important work 🤓
The boring, organizational admin work is actually where most of the progress happens. These are the tasks that speed up the funding process, and set a great impression with external counsel.
If the large law firm notices that everything is beautifully organized and indexed, it definitely reduces their anxiety -and yours!
If they’re impressed by the work you’ve accomplished, they’re likely to be more accommodating and engaged. On the other hand, if they notice that your legal knowledge base is a mess, they’re going to go into the round with more questions and nitpick at your decisions.
That basic work might not be the most enjoyable, but it definitely pays dividends in the long run.
2. Investors are much more forgiving than you might think… 🤗
I have a background as an M&A lawyer, which helped me out when I went in-house - I’ve been on the buyer side of transactions like these.
That buyer perspective means I know how much of a commercial risk the business will take if the opportunity is there - and how much investors understand this.
It’s natural for legal to enter conversations with investors and worry about the tick-box exercise work, investors aren’t expecting everything to be perfect. Investors aren’t going to expect you to have FTSE100 levels of compliance at a Series A, or Series B; so make sure you prioritize the quick wins.
“The boring, organizational admin work is actually where most of the progress happens. These are the tasks that speed up the funding process”
3. … But be honest! ✅
Transparency is key - we approached our Series B with transparency at the heart of everything we did when it came to communication with investors.
There were several areas of the business that weren’t yet up to global, world-class standards, but instead reflected Omnipresent’s scaleup status.
We decided to set expectations and align investors with our business early on by being upfront and honest about our points of improvement.
And they appreciated this, knowing that over time the legal team would revisit these areas, upgrade, and meet best practice levels.
"It’s a challenge to businesses working in unique industries, but having that deep knowledge and understanding of how your business operates can help the process run smoothly"
4. Understand your business inside and out 🧠
Omnipresent is structured in a way where we have several layers of employees; from internal employees, to those we employ through subsidiaries, on behalf of clients.
This meant it was quite challenging for our external counsel to understand the structure of the business, especially as standard lists for due diligence questionnaires may have applied to one category of employees, but not the others.
Similarly, our boilerplate templates may have benefitted one group of employees, but applied twice as much risk to another. Legal played the role of educators to explain how our industry worked and how we had to tailor these documents to suit our business.
It’s a common challenge to businesses working in unique industries, but having that deep knowledge and understanding of how your business operates can help the process run smoothly.
5. Stick to your guns 💪
Looking back, one thing I would do differently is stick to my guns. For example, one of the projects I completed in the business’ early stages was to create a set of naming conventions for our shared drive.
I policed this for several months to ensure colleagues adhered to the correct naming conventions, but of course, when you’re part of a small legal team, life gets busy. As my workload increased, I let this task fall to the wayside.
By the time we came to due diligence, finding the right information was a nightmare - especially as the questions we had to address were specific: “please find contracts with a termination date of three months”, for example.
Trying to sift through years of documentation to create an up-to-date, accessible database was a mountain of work for myself and our head of sales. If legal has an idea and it’s a good idea, make sure you enforce it and follow upas diligently as possible leading up to the funding round.
Projects such as these can be high stress, but also high reward. It can be hard to see the end goal when you’re wading through due diligence, but incredibly satisfying when the business confirms that investment and can start looking at how we develop.
This is a chapter from our quarterly, community-led publication, The Bundle. Download volume two, issue #1 for the latest need-to-know insights, by and for scaleup lawyers.