Private Equity

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.































We have committed ourselves to assisting our clients in making well-informed, productive and ultimately successful decisions on all issues that come before them.

We take pride in on our ability to provide each client with the attention to detail and high level of service that their transactions require, while at the same time providing practical and business-oriented advice and solutions.

Current News and Events

  • End of Year Tax Update

    The Tax Cuts and Jobs Act of 2017, signed into law by President Trump on December 22nd, 2017 (the “Tax Cuts and Jobs Act”), added Code Section 199A to the Internal Revenue, which provides for up to a 20% deduction applicable to pass- through income, including income from S-Corps, partnerships, and sole proprietorships. Given this new deduction, it is within an owner of a passthrough’s interest to maximize what the IRS refers to as Qualified Business Income (“QBI”) which is defined as income net of any deductions or losses from a qualified business or trade, including any wages paid by the pass-through entity. The IRS requires that shareholders of S-Corps who perform services for the S-Corp must have a portion of their distributive share from the S-Corp and other payments be classified and treated as wages so that the amounts are reasonable compensation for services rendered. Consequently, all S-Corp shareholders who perform services for the S-Corp must receive reasonable wages which will necessarily reduce the amount of QBI available for the 20% deduction provided by §199A.

    In order to remedy this potentially disadvantageous side-effect of being organized or treated as an S-Corp, it might be advisable, depending on taxable income, for entities to consider changing their taxable form to partnerships or sole proprietorships, as these types of entities are not required to compensate service providing shareholders with reasonable wages. Such a switch will affect many other tax elements, such as self-employment tax and Medicare tax liability. Furthermore, various states tax law regimes have laws specific to pass-through entities that may or may not be applicable depending on the structure of the entity. Because such a structural change will affect how income to individual shareholders is taxed at a statewide level, as well as at a federal level, it is highly recommended that tax advisors and counsel be consulted to determine the most tax efficient manner for taking full advantage of the §199A 20% income deduction. To take advantage of accelerated depreciation and expensing of certain business related assets, read the full update. Read More

  • Investment in Opportunity Zones

    In December 2017, President Trump signed The Tax Cuts and Jobs Act into law enacting a national Opportunity Zone program designed to provide significant real estate and other investors significant federal tax incentives to invest in 8,700 historically distressed, state-designated neighborhoods throughout the United States. Specifically, the federal tax incentives provided through the Opportunity Zone program may permit an investor not only to defer present taxation on any of its currently realized and recognized capital gains, but also to reduce the actual amount of capital gains ultimately realized in the future. In addition, for certain investments held for more than 10 years, any and all gains on such investment amounts will be 100% tax-free for federal income tax purposes, to the extent initially comprised of deferred capital gains. Read our client update todayDisclaimer: You should not act or rely on any information at this website without seeking the advice of an attorney. The determination of whether you need legal services and your choice of a lawyer are very important matters that should not be based on websites or advertisements.  Read More

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