KIELTYKA GLADKOWSKI KG LEGAL represents corporate clients in VENTURE CAPITAL and PRIVATE EQUITY investments. Our team builds the greatest practical experience based on the market and expectations of corporate entities based in the United States. However, not only companies from Bay Area or Delaware invest based on the Polish jurisdiction market. Our law firm has experience in multi-jurisdictional structures and also has experience in rare forms of doing business in the finance sector, such as a European company based in Germany.

KIELTYKA GLADKOWSKI takes into account the differences between these two types of investment vehicles when advising. We are aware that Venture Capital (VC) is equity capital that is contributed by investors for a limited period to small and medium-sized enterprises. Private Equity is a type of capital investment constituting an external source of financing for companies not admitted to public trading. The investor, which is usually a third party wealth management fund, is most often interested in the long-term increase in the value of the company in order to realize a profit at the time of resale of shares / shares in the future.

Securing the interests of a foreign investor in VENTURE CAPITAL and PRIVATE EQUITY projects

We secure VENTURE CAPITAL and PRIVATE EQUITY transactions by representing foreign investors who invest in companies under Polish law at various stages of development, from early stage to IPO. We have proven and transparent templates of contractual clauses of shareholders’ obligations towards the investor. The essence of a proper contract for a VENTURE CAPITAL and PRIVATE EQUITY venture is to properly secure financing for the company against the fulfillment of intermediate goals.

We create all corporate documents that provide investors with voting rights, blocks of shares or shares, objection rights, pre-emption and repurchase rights. We create the structure of transfer of ownership for security and the legal institution of pledge of shares.

We negotiate the terms of capitalization of Polish start-ups

We provide professional assistance in intellectual property rights, proprietary copyrights and industrial property rights and related rights to the created technologies, so that the foreign investor at every stage of the investment, including investments in tranches, has the proper transfer of intellectual property rights. For this purpose, KIELTYKA GLADKOWSKI has developed strategies, legal constructions (clauses) and solutions based on the existing practice, which allow not only the transfer of economic copyrights, but also moral copyrights with the proper application of the applicable jurisdiction clause.

We advise on contractual security in the so-called company funding. We carry out very detailed due diligence audits of start-ups and companies at an earlier stage of development for foreign investors.

KIELTYKA GLADKOWSKI has verified and proven providers of data transfer services for large due diligence purposes. We negotiate particularly favorable contractual conditions for VIRTUAL DATA ROOMS.

Thanks to our advice, we are sure that sensitive data and business data will never leak and will be irretrievably destroyed after the transaction is completed.

KIELTYKA GLADKOWSKI negotiates the best transaction insurance conditions.

We represent foreign investors in negotiations regarding the valuation of technology and its commercialization.

KIELTYKA GLADKOWSKI prepares comprehensive accounting, tax and legal documents (including corporate and registration decisions for commercial registers) in the event of takeovers and partial takeovers as well as the divisions of Polish companies with international shareholding.

In the case of an investor entering a Polish company (establishing a new company or taking up shares in an existing Polish company), we advise on voting rights and majority stakes as well as favorable corporate governance rules.

We advise on investment strategies, company portfolio management and financing.

We have experience in complex tax cases in the field of VENTURE CAPITAL and PRIVATE EQUITY. The legal advice rendered by our team very often has to take into account the complex cross-border structure of related capital entities based in countries with favorable tax regulations, such as UK dependent territories.

We secure the transactions in terms of regulatory issues, in respect to consents to concentration, we submit notifications to the Polish Financial Supervision Authority and the Office for the Protection of Competition and Consumers.

We represent foreign clients in investment disputes; regarding the annulment of the resolution, failure to perform the milestones from the investor agreements.

WE CARE about the legal environment for payment and investment financing in Poland.

We secure legally:

– creating investment structures and comprehensive support at the pre-transaction stage;

– implementation of investment structures, such as companies under Polish law, SPVs, syndicates and communities of interest.

We develop legal constructions of funds and their statutes.

We draw up management contracts.

We advise on how to create a structure in tax-friendly jurisdictions by investing in a Polish company.

KIELTYKA GLADKOWSKI advises on all legal aspects of seed capital.

We represent our Clients in all matters related to investments in tax-favorable economic zones and technology parks. See more:

– using greenfields (link) and corporate life (link).

KIELTYKA GLADKOWSKI is aware that the legal environment cannot interfere and limit the economic goals. Private Equity and Venture Capital investments are focused on medium and long-term profits. In both cases, the investor – i.e. the fund and its clients – will try to maximize the value of the company whose capital it provides, most often becoming its significant shareholder until the moment of exit from the investment. Company owners can count on our multidimensional support in managing their venture from the fund throughout the period of cooperation for the mutual interest.

PE/VC funds, unlike financing through various types of credit, do not burden the company with the need to repay debt, which is one of their main advantages. Plus, they give owners and teams more independence than industry takeovers. However, their interest can be counted on almost exclusively by companies with very good prospects in the perspective of several years.

The main differences between venture capital and private equity include the adopted strategy, the assumed date of profit realization, the type of investments undertaken, and above all – the degree of their risk.

Private Equity investments in Poland

Private Equity funds invest their own or their clients’ equity in private companies with a well-established market position. These companies should have a proven business model that allows them a steady, prospective income. This type of financing is usually addressed to companies seeking funds for further development, planning expansion into new markets, intending to transform part or all of the enterprise as part of a new strategy, launch a new product or technology, or make an acquisition. Although it is not a rule and each PE project is planned individually, these are usually low-risk investments, and their duration is medium and long-term (3-7 years). As part of the deal, the investor acquires a significant stake in the company, gradually increasing its value – which allows the inflow of cash provided by him – in order to sell the shares at the moment of exit at a higher price.

Due to the lower expected risk of investment failure or negative change in external factors, the rate of return on the sale of shares is not excessive compared to Venture Capital investments and is usually 20-25%.

What characterizes Venture Capital investments in Poland

The Private Equity and Venture Capital market are two faces of the same issue – VC funds are part of the Private Equity area. Private capital is also invested here, although the fund’s offer is addressed in particular to young companies and startups that are just about to test their product or service. VC funds are characterized by the fact that they usually look for unique and innovative projects, not yet verified by the market. In this case, the purpose of financing is to maximize the value of the company in the long term (5+ years). Unlike classic projects in the PE segment, Venture Capital investments are burdened with an increased risk of failure, which is directly related to the innovativeness of the project.

Venture Capital

•             investing in young companies and startups;

•             increased investment risk;

•             long-term development of the company in the portfolio (5+ years);

•             high rate of return;

•             interest in the potential of a company without an established position;

•             focus on uniqueness and innovation.

Private Equity

•             investing in developed companies;

•             reduced investment risk;

•             medium and long-term development of the company in the portfolio (3-5 years);

•             moderate rate of return;

•             interest in the potential of an established company;

•             focus on continued development and expansion.