Private Equity Placements are a key element of financial strategy for companies in Georgia seeking alternative growth sources without going public. This process involves the direct sale of company shares or interests to private investors, investment funds, or venture capitalists. The private equity market in Georgia is becoming increasingly attractive, especially in the technology, energy, and real estate sectors. Private placement allows a business to attract "smart capital," which implies not only finances but also the investor's experience, connections, and modern management standards. However, such transactions are characterized by high complexity and require detailed legal regulation to avoid conflicts between owners. The Legal.ge platform offers access to experienced lawyers specializing in private equity transactions and corporate law.
What does the Private Equity Placements service cover?
Legal services related to private equity placements cover the full cycle of the transaction and ensure a balance of the parties' interests. The service includes: selecting the investment structure (direct investment, convertible loan, preferred shares); conducting legal Due Diligence for the issuing company; preparing the agreement on main terms (Term Sheet); drafting the share purchase agreement (SPA); preparing the Shareholders' Agreement (SHA) that regulates voting rights, dividends, and exit strategies; compliance with requirements of the Law on Securities Market (private placement exemptions); and registering corporate changes in the public registry. Lawyers also provide negotiation support, which is critical when agreeing on company valuation and control mechanisms.
Common real-world scenarios
Private equity placement is often used at various stages of business development. The first scenario is "Seed stage" financing for startups where angel investors provide capital for idea realization. The second scenario concerns "growth capital" when an established company needs additional funds for expansion or entering new markets. The third scenario is "Management Buyout" (MBO) when the company's management, with the help of a private investor, buys the business from existing owners. It is also common for a family business to decide to bring in a professional investment fund to improve corporate governance. Each of these cases requires specific legal instruments, such as "Drag-along" and "Tag-along" rights, so that the investor and founder feel protected.
Georgian Legal Framework
Private equity placement in Georgia is regulated by several key acts. Primarily, it is the Law of Georgia on Entrepreneurs, which defines the forms of legal entities and the rights and obligations of partners. The second important act is the Law of Georgia on the Securities Market, which establishes criteria for when an offering is considered private and in what cases National Bank involvement is needed. The Law of Georgia on Investment Funds regulates the activities of entities that carry out capital placements. The Civil Code of Georgia is also taken into account regarding contractual obligations. A lawyer's assistance is essential for the harmonization of these laws, especially when the transaction involves complex financial schemes or foreign jurisdictions.
Step-by-step process when working with a specialist
The process begins with an assessment of the company's investment readiness. In the first stage, the lawyer carries out an internal audit so that any legal flaws are corrected before the investor enters. In the second stage, an investment memorandum is prepared and a non-disclosure agreement (NDA) is signed with the potential investor. The third stage involves negotiations around the Term Sheet and preparation of the main agreements (SPA/SHA). In the fourth stage, the closing of the deal occurs, implying the transfer of funds and reflection of equity changes in relevant registries. The fifth stage involves post-transaction support, such as implementing a new corporate governance structure. The specialist ensures that the entire procedure is conducted transparently and considering international best practices (VCA/ILPA).
Why choose Legal.ge?
Private equity placement is a complex process where a mistake can lead to the loss of control over the company's management. On the Legal.ge platform, you will find verified lawyers and consulting firms that have practical experience in conducting private investment deals. Our experts will help you achieve the best terms and ensure the legal integrity of your business. Through Legal.ge, you have the opportunity to compare professionals according to their ratings and successful cases. Find your legal advisor on Legal.ge and carry out private equity placement on a professional level. Our platform offers a reliable partnership for your business growth.
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