When the unexpected happens and when adversity turns into triumph

APPOINTED BY INVESTOR TO THE BOARD OF A LONDON BASED TECHNOLOGY BUSINESS IN THE DIGITAL OUT-OF-HOME ADVERTISING SECTOR

My involvement

A pre-revenue global advertising technology business. A great example of the unexpected happening and having to be dealt with. I had been introduced to the inward investor by the London law firm I worked with immediately post-qualification over 20 years beforehand. On his behalf I was involved in negotiating the terms of inward investment (negotiating the shareholders agreement and instructing lawyers to document it). I was subsequently placed on the board of the investee company (TechCo) by the investor.

Unexpectedly, I then faced the following challenges:

• Identifying the need to replace executive management when their inability to raise development funding became clear, and then seeing that through resulting in a more involved role for me.
• Restructuring the ownership (new shareholders agreement) and implementing an informal creditors’ voluntary arrangement to secure the position of the investors as a pre-condition to further interim funding from them pending identification and recruitment of a new executive management team.
• Determining and overseeing the response to US Federal Court litigation, unexpectedly commenced in New York by a claimant who saw TechCo as its competitor and sought, firstly, a declaration that its own technology does not infringe TechCo’s US patent and secondly, damages for business interruption. Instructing UK and US attorneys. Managing the attorneys’ inputs and TechCo’s strategy.
• Settling the litigation on terms involving the grant of a licence to the claimant in return for a seven-figure one-time $ payment to TechCo (so achieving first revenue for TechCo) and an ongoing share of the claimant’s revenues.
• Negotiating the deal with new executive management led to TechCo holding a minority equity stake in a new entity (NewCo) created to evolve the business (another shareholders agreement and executive management service agreements), with consequent transfer of IP and know-how from TechCo to NewCo.
• Assumed a directorship of NewCo. Involved in NewCo’s corporate finance, business development, IP protection and contractual issues, orchestrating the sensitive challenge of a change of Chairman, to a new Chairman better equipped to manage the rapid growth phase through to shareholder exit.
• Continuing also as a director of TechCo as well as NewCo. For TechCo, dealing now with planning its longevity, taking account of its prospective revenue share from the New York protagonist under the terms of the litigation settlement and its equity stake in NewCo. For NewCo, overseeing the corporate and contractual structuring of the business through the growth phase, so as best to position the company for the targeted shareholder exit, inter alia by avoiding issues likely to complicate pre-sale purchaser due diligence.

Outcome

Restructuring completed, litigation overcome with the threat turned into a gain, new executive management team in place, leading the role in contractual and know-how protections for new revenue opportunities and in development funding, and positioning the business for growth and shareholder exit. Working throughout as part of a team. This wide-ranging role is ongoing in pursuit of sustainable revenue and then the shareholder exit.