As counsel to some of the world’s most prestigious domestic and offshore hedge funds, private equity funds and investors, Akin Gump Strauss Hauer & Feld LLP has deep knowledge and experience in complex seed transactions. Such arrangements vary from an initial anchor investment in a new hedge fund to a direct investment or working capital loan to the management company in exchange for a revenue share of the manager’s business.
Our team executes successful seed capital arrangements relating to both entrepreneurial start-up ventures as well as established investment institutions across virtually every strategy, industry and jurisdiction.
Our team has extensive experience representing both seed capital providers and hedge fund managers being seeded, including:
- seeding platforms
- “one-off” seed arrangements
- spin-outs of investment teams from existing managers and financial institutions.
Our lawyers dedicated to this practice have unparalleled knowledge of industry terms, including cutting-edge information on structure and the market, such as:
- tax-efficient structure for the investment
- economic terms for the revenue share
- structure governing the exit of a seed arrangement, including sunset rights
- minority protection rights
- restrictive covenants for the manager
- transparency rights
- related compliance issues.
Further, the firm’s international footprint gives us the critical capability to structure seed arrangements for those managers who will be launching start-ups in multiple jurisdictions.