Steele Weighs in on What Happens When Investors and Founders Collide
October 9, 2017
At the International Bar Association’s annual conference in Sydney, partner Myron Steele participated in a panel titled “When Investors and Founders Collide: Preventing, Diffusing and Resolving Disagreements About Corporate Strategy, in Good Times and in Times of Financial Crisis.”
The panel covered a broad range of topics, including:
- Governance best practices to avoid deadlock or prevent a veto situation that could paralyze the company
- Funding through revenue or investment: anticipating mechanisms for additional capital contributions that address anti-dilution concerns while realistically providing cash-flow support in times of financial crisis, or at times when the founder and other constituencies disagree on a growth strategy
- Consideration of how related party transactions affect the dynamic
- The additional stress placed on the decision-making process if the company also faces a time of financial crisis when the consideration of insolvency or bankruptcy concepts comes into the equation, and planning for 'distressed funding' options
- Lawyering in times and crisis, identifying 'who is the client' and the use of special committees
The multinational panel included representatives from Australia, Brazil, France, Switzerland and the U.S.
