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Press releases — 9 June 2005

Law Firm offers Fixed Fee Investment Solution for Growing Companies

Growing companies that raise finance through Oxfordshire Investment Opportunity Network (OION), Europe’s leading technology business angel network, will be able to benefit from an innovative fixed fee investment solution devised by Laytons, a national law firm and sponsor of OION. The fixed fee scheme is thought to be unique amongst law firms and should enable hundreds of early stage ventures to benefit from significantly reduced costs for the specialist legal advice and documents required to complete the investment process.

Dr Jon Cox, Manager of the OION Network, said:

“We are delighted that Laytons are introducing a fixed fee investment solution. This addresses the common problem of early stage companies facing legal bills that are disproportionate to the investment raised. A recent survey of companies that received investment through the OION showed they faced average legal fees of £10,000 on an investment of £250,000. The survey also revealed enormous variations in legal charges, which ranged from £7,500 to £25,000 for investments between £250,000 and £500,000. By contrast, Laytons will charge a fixed fee of £5,500 for investments up to £250,000 and then £5,500 plus 1% of the investment for amounts over £250,000 – up to a maximum charge of £10,000.

By recommending Laytons Investment Solution to our investors and to companies seeking finance through OION we aim to help them control their costs, while ensuring that they still receive high quality legal advice and documents that also satisfy the protections required by our investor members. We are sure that this will prove a popular solution.”

In pioneering the fixed fee scheme, Laytons and OION are acting ahead of financial industry bodies such as the British Venture Capital Association, which have raised concerns about disproportionate legal charges for investment documents.

Richard Kennett, Chief Executive Partner at Laytons, explained:

“The British Venture Capital Association has announced plans to tackle the problem of variable legal fees by introducing standard investment documentation by 31 December 2005. However, we wanted the Laytons Investment Solution to be more than just a set of standard documents, and it is specifically designed to meet the needs of the high growth potential, technology-based companies that typically attract investment from OION members, and who need to keep legal costs to a minimum. As well as drafting the key legal documents required to complete an investment we will give legal advice on important areas of the company’s business that need to be addressed and handle the administration required to complete the investment process. We hope that this initiative will be welcomed as a fair and sensible solution that should enable early stage companies to minimise negotiating time and avoid uncertain and high legal costs.”

Press Release Ends

NOTES FOR EDITORS

PHOTO AVAILABLE ON REQUEST

Dr Jon Cox, Manager of Oxfordshire Investment Opportunity Network, which has teamed up with Laytons to pioneer a fixed fee investment solution for companies raising finance through the Network.

Press enquiries to: Margaret Henry, OION PR Manager.
Tel: +44 (0)1865 811199  E-mail: Margaret Henry

  1. Oxford Investment Opportunities Network (OION) www.oion.co.uk

    Oxfordshire Investment Opportunity Network is Europe’s most successful technology business angel network that links investors with entrepreneurs seeking business development funds from £150,000 to £2m. OION helped 13 companies raise £2.5m in the year to March 2005, and during the last five years, has helped 74 companies raise £17.3m. OION holds monthly meetings where selected companies can pitch their proposals to OION's members, which include over 130 active business angels, VCTs and venture capitalists.

    Many of these companies are university spin-outs and OION is uniquely positioned to help them. OION holds regular joint presentation meetings, and has strong links with, universities with a reputation for spinning out quality technology companies such as, Warwick, Oxford, Bristol, University College London and Imperial College London.

    OION is managed by Oxford Innovation Ltd (www.oxin.co.uk), the UK’s leading operator of innovation centre premises for start-up companies, and sponsored by HSBC, Grant Thornton, Laytons, Frank B Dehn & Co, NESTA and Business Link.

  2. Laytons

    Press enquiries to: Richard Kennett, Chief Executive Partner
    Tel: +44 (0)20 7842 8000 Email: richard.kennett@laytons.com
    Website: www.laytons.com

    Founded in 1875, Laytons acts for a wide range of businesses, from ambitious start-ups to thriving quoted companies. The firm prides itself on its dynamic approach and its emphasis on understanding, and reacting to, the needs of its clients.

    ABOUT THE LAYTONS INVESTMENT SOLUTION

    The Laytons Investment Solution offers legal services at a fixed cost. It is designed to meet the needs of investee companies who need certain legal costs that are proportionate to the investment raised, and of investors, who need to know that the company in which they are investing is properly established and that key legal requirements are met.

    The Solution consists of the key standard documents needed to complete an investment: Non-Disclosure letter; Heads of Terms; Investment Agreement; Articles of Association and Employment Contracts. It also includes an additional investment service including: a legal audit of the company, administration to complete the investment process and a Laytons Investment Certificate confirming that the result of the legal audit was satisfactory and that the investment documents have been prepared in accordance with the Heads of Terms. Although Laytons will be appointed by the investee company, the investors can rely on the Certificate for which Laytons will accept responsibility.