ReSolve concludes fundraising for pre-revenue technology development company - ReSolve Group UK

ReSolve concludes fundraising for pre-revenue technology development company

ReSolve Group UK

ReSolve concludes fundraising for pre-revenue technology development company

Our client had successfully developed an innovative automotive technology product but needed to raise funding to enable further development to meet clear market demand. Previous fundraising attempts got close but were not able to be concluded and, at the time of our appointment, remaining liquidity was running very low.

The shareholding of the company was complex and split between founders, angel investors, institutional investors and a trade investor. Given the challenges the company was facing, shareholder relations were tense and there were differing and conflicting opinions and positions.

The company was facing cash flow insolvency without an emergency fundraising which would have proved very value destructive and could have resulted in a cessation of the development. The Directors were also very concerned about their legal and fiduciary responsibilities.

ReSolve was appointed to both advise on the fundraising and solvency considerations.

ReSolve supported the Directors to try to secure additional funding both from existing discussions with interested parties and by introducing new potential investors. ReSolve also advised and helped the Directors manage their responsibilities throughout the process given the liquidity position of the company and ran a parallel contingency planning process.

Throughout the process stakeholder management was key as interested parties were at very differing levels of progress and the shareholder position meant there were also internal barriers to  the likely success of any fund raise. ReSolve worked closely with all stakeholders to manage and align expectations and ensure the smooth running of the process, in an accelerated timescale.

Funds were raised from certain incumbent shareholders supplemented by some new parties. This required negotiating with key shareholders who were not participating in the funding to accept a dilution in their shareholding and waive rights of veto.

An innovative investment structure was developed to secure funding for short term liquidity requirements with an agreed, committed balance structured to be eligible to be matched by a successful application to the Government Future Funding scheme, which raised a total of over £5 million of net equity.

Lee Manning, Partner, ReSolve said

‘We are pleased to have been able to help this innovative technology company navigate the funding and solvency challenges it faced and we wish it every success in the future.’

Anup Shah, Partner, ReSolve added:

‘This was a complex situation with several stakeholders which required careful managing against a tight liquidity position to deliver a successful outcome. It’s very satisfying to contribute to an outcome which the Board summarised as “beating the odds”.

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