Advice for start ups on involving an investor

Amelia Vaughan Amelia Vaughan 29 June 2022

Investment vehicle Northern Gritstone, which was founded by the Universities of Sheffield, Manchester and Leeds, is now beginning to make its initial investments in companies from its pot of £215m.

The company, chaired by Lord O'Neill, is aiming to raise up to £500m and become one of the largest investors of early stage university spin outs.

It will also invest up to 10 per cent of the funds into intellectual property rich businesses in the north of England with a particular focus on businesses licencing intellectual property from each of the Universities of Sheffield, Manchester and Leeds.

After its first close of funding, Northern Gritstone has made its first investment of £3m into Opteran, a University of Sheffield spin-out which has harnessed insect brain patterns to pioneer developments in autonomous machines.

Amelia Vaughan looks at how Wake Smith Solicitors can help start ups and offers a check list on key requirements when launching a business or partnering with an investor.

Terms of investment

If your business is receiving funding, or in negotiations to receive funding, from Northern Gritstone, you may have questions as to the terms of their investment and how it will affect your business.

Using a commercial unit?

In the early days of a university spin-out, you may be using part of a commercial unit and sharing the costs arising from the space.

We can assist you with this transition in preparing the following:

  • A Lease/ Room Hire Agreement; and
  • A Transitional Services Agreement.

Involving a new investor?

If you are involving a new investor, such as Northern Gritstone, a new Shareholder and/or a new Partner, there are many legal documents to consider.

We can assist you in a variety of ways, including, but not limited to, drafting:

  • Share Purchase Agreements
  • Investment Agreements
  • Shareholder Agreements
  • Partnership Agreements
  • New Articles of Association
  • Loan Agreements and
  • Ancillary documents arising in connection with the above.

If you would like to discuss becoming or accepting a new investor/ Shareholder/ Partner and your business requirements, please call our Company Commercial team on 0114 266 6660.

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