Zoppi & Co Advises on 6-Figure Equity Financing for Hospitality Business

Overview
Zoppi & Co recently advised a London-based hospitality business on a six-figure equity financing deal. The business, with multiple locations across the city, sought to raise capital while ensuring compliance with HMRC’s SEIS (Seed Enterprise Investment Scheme) and EIS (Enterprise Investment Scheme) requirements.

Structure of the Deal
The financing involved the issuance of different classes of shares to separate categories of investors. To safeguard the interests of both founders and investors, several key provisions were included:

• Drag and Tag Along Clauses: These provisions ensured that minority shareholders would be protected if there was a sale of the company or a majority shareholder decided to sell their stake.
• Anti-Dilution Provisions: These clauses protected investors from their shareholding being diluted in future funding rounds.
• Founder Reserved Rights: Certain key business decisions were reserved for the class of shares held by the founders, ensuring they retained control over critical aspects of the business.

Objective of the Client
The client’s goal was to raise substantial equity financing while remaining fully compliant with the regulations of SEIS and EIS. This would allow them to offer tax relief to their investors, enhancing the attractiveness of the investment.

Legal Representation
The deal was led by Malcolm Zoppi, Zoppi & Co's corporate solicitor. His expertise in corporate law and deep understanding of the hospitality sector enabled a smooth process. Commenting on the transaction, Malcolm said:

"It was a great honour advising on this deal. The balance between raising significant capital whilst retaining the founders' control was a particular highlight of this project."