Case 22Corporate venture capital fund in Nigeria
Setting up a corporate venture fund for an established company.
An established company wanted to invest in the startups shaping its industry. We designed the fund that lets it do so with discipline, separate from its core business.
- Client
- Established Nigerian company (confidential)
- Sector
- Corporate venture capital
- Practice
- Venture & Technology
- Jurisdiction
- Nigeria
The brief
The client, an established company, wanted a dedicated vehicle to invest in early-stage companies relevant to its business. It needed the fund to move at the speed founders expect while protecting the parent from liability and keeping its strategic and financial objectives aligned.
We advised on the fund from design through launch: the vehicle, its governance, its relationship with the parent and the terms on which it would invest.
Our advice
- 01
Vehicle selection
Assessing a balance-sheet subsidiary, a limited partnership and a ring-fenced investment company against the client’s objectives, tax position and any plan to bring in outside investors later.
- 02
Governance and mandate
Setting the investment mandate, the investment committee and its delegated authority, so that decisions are made quickly and independently of day-to-day group management.
- 03
Conflicts and strategic rights
Managing the tension between financial return and strategic value, including information rights, rights of first refusal and the treatment of portfolio companies that compete with or supply the parent.
- 04
Regulatory compliance
Advising on SEC requirements, foreign-exchange and capital-importation rules for cross-border investments, and the tax treatment of the fund and its returns.
- 05
Investment documentation
Preparing standard term sheets, subscription and shareholders’ agreements so the fund can invest on founder-friendly, market terms.
Outcome
The client launched a corporate venture fund with a clear mandate, independent decision-making and documents ready for its first investments, ring-fenced from the parent’s core business.