Private investors have one overriding mission – to find, cultivate and nurture portfolio companies to increase revenue and value for their shareholders. But if you only receive a Board of Directors view of your new investment, the lack of transparency can be unsettling.
Shields Legal Group offers a unique service that provides an insider’s view of the portfolio company.
Our Outside General Counsel model provides strategic business solutions to the portfolio company’s operations and legal matters. At your suggestion to the portfolio company’s CEO and Board, they hire SLG as Outside General Counsel. The company and major shareholders receive and review the results of our efforts to ensure consistent, stable processes and operations. Efficiency, focus and production improve, increasing revenue and profits.
The benefit of this approach is to transition the company from family run to professional managed.
When a family owned or closely held business receives an injection of capital, they may not have the internal processes and controls in place to handle the growth. Areas that are commonly strained included Human Resources, Accounting, Finance, Contract/Risk Management and Finance. Without the proper procedures, processes and practices in place, your new investment could create new problems for the portfolio company that were not anticipated.
As the portfolio company’s Outside General Counsel, we create consistent, ongoing strategies in 5 key areas.
Companies offering either a product or service need help transitioning to from family run to professionally managed. Those 5 key areas include:
- Contract Review/Processes – Terms, default provisions, termination and payment perimeters are reviewed to align with the business model; We recommend strategic internal processes to ensure consistency and predictability with vendors and customers.
- Corporate Governance – Are management roles well-defined? Are the proper corporate documents in place to stability and revenue growth?
- Conflict/Risk Management – Operating risks and litigation are evaluated and strategies developed to improve and resolve; internal procedures are created to prevent future systematic issues.
- Human Resources – Employee documentation, hiring and firing practices are reviewed to ensure compliance with local, State and Federal laws.
- Finance – We analyze funding source terms and loans to ensure alignment with business objectives and goals.
The result of our engagement is a win-win for both the portfolio company and you, as the investor. Operations are more efficient, legal problems are resolved and procedures put in place to address future concerns. Financing of inventory or other loans are reviewed to ensure alignment with business objectives. As each of these critical areas become more efficient and focused on profitability, shareholder value increases.
Please note: This article is for general information purposes only and should not be considered legal advice. You should not act on information received from this article without first seeking advice from your legal counsel.