The DarrowEverett Private Equity, Venture Capital & Securities Group is comprised of attorneys with substantial expertise in negotiating sophisticated transactions including corporate debt and equity financings, joint ventures, mergers and acquisitions, asset dispositions, subordinated and senior debt transactions (including second lien lending), convertible debt financings, tax credit financings, securities issuances and other capital raises, recapitalizations, restructurings, buyouts, takeouts and equity syndications.
Members of DarrowEverett LLP’s Private Equity, Venture Capital & Securities Group have a successful and proven track record of assisting investment firms and fundraising ventures reach their business objectives, including fund formation and maintenance, fundraising and solicitation of capital, acquisitions, management of portfolio companies, divestitures, management and leveraged buyouts, private investments in public equity (PIPEs), special purpose acquisition companies (SPACs) and mezzanine and distressed investments.
In addition to advising on Securities and Exchange Commission rules and regulations and assisting clients in structuring and negotiating equity transactional terms such as complex cash flow and capital transaction distribution waterfalls, group lawyers assist clients in preparation of private placement and/or syndication documentation including “cut” or term sheets, letters of intent, executive summaries, private placement memoranda and prospectuses, limited liability company and partnership agreements, special purpose entity documentation, securities certificates and legends, convertible promissory notes, investor questionnaires, subscription agreements, Form D filings with the Securities and Exchange Commission and applicable state “blue sky” securities filings and compliance materials.
DarrowEverett LLP has substantial experience counseling clients on critical federal and state tax issues relating to development and private equity projects involving tax credit equity investment and syndication components. Monetization and syndication of tax credits (including alternative energy tax credits such as the Investment Tax Credit and Production Tax Credit as well as the Historic Rehabilitation Tax Credit) can provide additional financing sources to project developers which can be brought in alongside a project’s other debt and equity funding sources. As developers typically lack the passive income required to maximize the economic benefit of investment-based tax credits, monetizing tax credits through credit allocations to tax credit investors, in exchange for capital contributions to fund project development, can enhance the economic feasibility of many alternative energy and historic rehabilitation projects. By syndicating tax credit equity, developers can monetize expected future tax benefits by exchanging the rights to future tax credits for current capital contributions. Tax credit equity syndications require specialized tax, corporate, finance, renewable energy and real estate counsel working in concert on transactional structuring and rely on specialized, tax-driven structures such as the partnership flip and master lease, among others, but, under appropriate circumstances, can unlock substantial project value.
Examples of recent transactions in the Private Equity, Venture Capital & Securities Group include:
- Real estate development firm in $65 million corporate joint venture with major national commercial real estate finance company.
- Investment firm in $30 million real estate acquisition and development fund.
- Trustee with respect to medical devices company in $9.2 million sale of assets out of Chapter 7 bankruptcy auction process.
- Nanotechnology company in $5 million Series B private offering to multiple venture capital firms.
- Real estate development firm in $4 million sale of limited partnership interests in real estate acquisition and development funding entity.
- Real estate investor in $2.5 million equity acquisition of preferred interest in condominium tower project through limited liability company and partnership structure.
- Private real estate management firm regarding $2.5 million equity acquisition of preferred equity interests and associated control rights in connection with multifamily housing complexes financed by the Department of Housing and Urban Development.
- Rental property management software developer and rental data aggregator in multiple subordinated convertible promissory note and Series A financing rounds.
- Hotel developer in $1.8 million development equity financing to individual limited liability company members and tax credit equity providers.
- Financial aid software developer in $1.7 million dollar multi-tiered convertible debt offering and conversion of promissory notes into common stock.
- Consumer software development company and peer-to-peer marketer in $1.1 million private placement of Series A convertible preferred stock to certain individual investors.
- Real estate development firm in $1 million sale of limited liability company interests in real estate acquisition and development funding entity.
- Start-up medical devices company in $500,000 private placement of Series A convertible preferred stock to certain individual and angel investors.
- Online construction networking company in proposed $400,000 private placement of Series A convertible preferred stock to certain individual investors.