Paul Amiss, partner at law firm Winston & Strawn on how an IPO can benefit a growing business and why it is important to hire a good advisor.

What are the details of the law firm,when was it founded and what is its vision?

Winston & Strawn LLP is an international law firm with 16 offices located throughout North America, Asia, the Middle East and Europe. Founded more than 160 years ago, Winston serves as a trusted adviser for clients across all industries. The firm partners with clients to fully understand their business, goals, strategy, and culture to ensure they achieve long-term success– it is this commitment and integrated capabilities that we believe sets our service apart.

Please discuss the importance today of good legal advice for scale-up companies, and any interesting industry patterns that scale-ups should be aware of when seeking advice.

Scale up businesses can incur growth rapidly, leading to fast track processes to realise value for founders. It is important for such companies to prepare in advance for such transactions by building solid foundations around their legal affairs at the outset and not skimping or cutting corners in this regard.

Any deficiency in a growth company’s legal affairs will come out in the due diligence exercise conducted for a process to realise value, be that an institutional investment, sale, or IPO. It is not always possible to rectify past misdemeanours, be they technical oversights or otherwise, and such oversights could have a material impact on value. The company should therefore be set up at the outset to grow and taking good advice from experienced legal advisers at an early stage is key and should not be overlooked.

One common deficiency for scale up businesses is how staff are incentivised. Share incentive schemes are commonly used to incentivise staff but robust and forward thinking advice should be taken not only when these schemes are set up but at every stage that options are granted. Expansion into new markets is another example of where robust and forward thinking advice should be sought at the outset.

What is the history of the firm’s advisory work on high-profile deals in the growth business industry and how does its services set it apart?

Partnering with our clients at an early stage is an important part of understanding and growing their business successfully.

We have been representing a US web based operating in the retail sector, in respect of numerous corporate matters for almost 10 years, shortly after the company was founded. The company is now one of the world’s largest online sites in its sector and our US team recently advised on its IPO – the biggest by a U.S. web company since Google, Inc.

In the UK, as mentioned below, we recently acted for high growth behavioural science business Mind Gym Plc on its £145 million AIM IPO and related £50 million vendor placing. We also recently advised independent housebuilder, Vanderbilt Homes to secure additional funding from Cheyne Capital to provide further support for its ambitious growth plans. Vanderbilt has seen its turnover grow by 60 per cent in the last three years.

Our experience advising growth companies on these types of transactions gives us insight to the latest legal, regulatory and commercial trends that could potentially affect businesses and entrepreneurs today.

What is the standout transaction for the firm in recent months and how did it apply its expertise to contribute to a successful deal?

We recently advised Mind Gym Plc on its AIM IPO with a market capitalisation of £145 million. Mind Gym is a behavioural science business that uses scalable proprietary products to deliver human capital and business improvement solutions to large organisations. It has operations in the UK, U.S, and Singapore. It has worked with 62 per cent of the current FTSE 100 companies, and more recently it had experienced rapid growth into the US.

The transaction involved a vendor placing by the founders and employees to realise £50 million worth of value for them. The placing was oversubscribed and since IPO the share price has risen by more than 20 per cent. We managed to structure the deal to ensure that the founders were able to realise value but retain control of their business as they seek to take it to the next stage of its development.

The successful outcome to this IPO was the culmination of a process of working with the client for the past nine months, having originally been brought in to advise them on a different project. Gradually our involvement developed into advising the client on alternative strategies which ultimately led to the successful IPO.

The IPO was carried out on a tight timescale. Our knowledge of the business that we had previously developed proved invaluable in enabling us to identify issues early and being able to resolve them before they became a problem. This continuity contributed to a relationship that is built on mutual trust and confidence and one that is critical to executing a successful transaction.

What are the key pieces of advice you would give to an ambitious, scale-up entrepreneur who seeks legal services for fundraising, flotations, or other transactions, and may not be familiar with the process.

In terms of process, maintain a strict timetable with regular all party calls to ensure that all work streams are in hand and on time. If you can engage a corporate finance adviser to conduct this project management on your behalf you will find this to be invaluable.

Allocate resources internally to the transaction – set up an internal client deal team to manage a data room, due diligence requests and verification items – these are all consuming processes and will often take up all of your internal team’s working time. The founders must also be dedicated to running the transaction internally and must be prepared to give up sufficient time for the process. Delays to information requests and instructions can adversely affect the timetable. To get the best out of them, your advisers need to be apprised on a timely basis with all relevant information and they should also receive clear and consistent instructions.

Conduct a beauty parade to find the right adviser for you and do not make the mistake of choosing one solely on price.

Transactions such as IPOs can often be painstaking processes and you need to ensure that your advisers are the right fit for you and your people and that there is chemistry, not only between you and the lead partner on the deal, but also between the respective legal and client teams. This is critical for scale up businesses where people and culture are a key asset. Get the adviser that fits from a personality perspective but also from an expertise standpoint. Clients tend to pay for what they get. In the above transaction the client has said that we were “one step ahead and worth every penny” and with feedback like that I feel that I am in the right profession.

Paul Amiss is a Partner at law firm Winston & Strawn LLP and is based in London. He advises on key domestic and cross border corporate transactions for private equity, strategic companies and entrepreneurs. He has worked with scale up businesses, realising value for their founders whether through sale processes or IPOs. Find out more here