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The important documents to consider when dealing with investors for your SME.
At Navistar Legal, we want to empower small business owners to feel confident when exploring the world of investment. When it works well, it’s a boost for your business, but like any major strategic business decision, there are pitfalls to avoid.

So we have put together this three-part blog series to answer any questions you might have around investment for your SME, from the key issues to be aware of to maintaining control of your business to what you need to get in writing.



In part three, we are going to look how at the important documents to consider when dealing with investors for your SME.

Why do I need to put anything into writing?
In an ideal world, your business would have every agreement in writing signed by all parties, stored appropriately and updated upon renewal. But, in the world of small business when you are having to deal with so much with little resource, there may be a few loose ends.

An agreement doesn’t have to be in writing to be legally binding, but getting something on paper is a simple way to avoid issues in the long run. Putting the terms of an agreement into writing gives you a greater level of clarity and understanding. It gives everyone a basis to work from, the opportunity to discover any gaps in your understanding, ask questions and discuss the “what ifs?” It reduces the likelihood of disputes, broken promises and severed relationships. It also acts as a record of what was agreed and acts as evidence should disputes arise.

So what are the essential documents you will need when considering investment for your SME?

NDA
Before you provide any details about the company, you will want to protect yourself against any unauthorized disclosure of your company trade secrets with a non-disclosure agreement. 

Investors must be obligated to keep the information that you are providing to them confidential, especially if they are investors that have invested in similar companies, it is imperitive that your plans are not shared or used to improve your competition.

Subscription Agreement
Subscription agreements are usually for larger investments, but they can be useful to get people to sign on the dotted line and as well to show other investors that other people have agreed to invest. It is lower risk to an investor, since if you do not raise the initial investor, the agreement falls away.

Shareholders’ Agreement and Articles of Association
A shareholders’ agreement can be made at any time during the lifetime of a company, but is usually made when a new company is set up. As a shareholder, even if you don’t have a shareholders’ agreement, you are still bound by the articles of association.

A company’s articles of association set out the basic rules, processes and procedure for your company. Like most businesses, you may never have your articles of association and they are often forgotten. That is not a problem when you own 100% of the business or are the sole director. But if that changes you want to ensure that they reflect accordingly.

There are some differences between having a shareholders’ agreement and articles of association.

Articles are a public document, open to public inspection at the Companies Registry. So if you want to keep certain things secret, you will want it in a shareholders’ agreement which is a private contract.

The articles can be altered at any time by special resolution of the members, ie 75% of the votes of those present at a general meeting. A shareholders’ agreement cannot be amended except with 100% of the people who have agreed to that contract.

If you have a shareholders’ agreement you will want to make sure that the same terms are reflected in the articles as well.

Director’s Agreements
If you are bringing other directors on board ensure that they are aware of their director’s duties. Each of these can be put into a director’s service agreement. If a new investor is coming on board, think about any director’s agreement that they want put in place because it may impose additional obligations on you.

Minutes and Resolutions for Shareholder and Board Meetings
Board minutes and resolutions are important documents that demonstrate that the current directors or shareholders have approved certain decisions. When shares are being issued, or shares are being transferred the board or shareholders may have the right to make these decisions.

Once any agreement is signed, make sure that it is stored somewhere easy to access. Records are important and often overlooked in the creative and chaotic entrepreneurial space. Although creating a system for organising your documents requires some initial thought and effort, it doesn’t need to be costly and it is worth the effort.

Good luck with investing to grow your business! At NaviStar Legal, we understand how important this step is for your business and are always on hand to guide you through the investment process. Call us on 0800 133 7509 OR book a slot to speak with a lawyer here.
Maintaining control when you bring investors on board
At Navistar Legal, we want to empower small business owners to feel confident when exploring the world of investment. When it works well, it’s a boost for your business, but like any major strategic business decision, there are pitfalls to avoid.

So we have put together this three-part blog series to answer any questions you might have around investment, from the key issues to be aware of to maintaining control of your business to what you need to get in writing.

In this piece, we’ll be exploring how you maintain control of your business when you bring investors on board.

Most business owners want everything to be fair. Most want to run their businesses ethically and inclusively and for democracy to rule to ensure a harmonious and happy team.
However, when you have additional shareholders or directors, it can be complicated. Not having clear direction from one person can cause chaos.

So when bringing investors on board, at Navistar Legal we suggest that you maintain control over your business and its decisions.

What does that mean? What kinds of control are in your business?

1: You are a director in your company.
The director runs the company on a day-to-day basis.
Each director is required to adhere to certain director duties and is in a position of legal responsibility for the company.

You do not need to be a shareholder in order to be a director of the company. As you get more directors appointed then this will be called the “Board of Directors” or the “Board”.
You can choose to be the sole director of your company.

Investors do not need to be a director, but since investors know that this is where the real power lies, some may ask for the right to appoint someone as a director to act on their behalf.

2: You are a shareholder of your company. 
Strictly, the only obligation of the company to you as a shareholder is to make sure that the company makes a profit.

As a shareholder you have certain rights, such as the right to dividends, receipt of financial information and to be called to any meeting of the members. Your rights are usually governed by the articles of association of a company or, if you have one, in the shareholders’ agreement.

The shareholder and director hats can create a conflict of interests so it is important when you make decisions that you know which hat you are wearing .

3: You are working for the company. 
This may be as a consultant or as an employee. Likely the latter, since you will probably be paid at least a minimal salary. As an employee you have roles and responsibilities to provide to the company in exchange for your salary. 

So how do you maintain control?
Within the role of director and shareholder, there are several ways you can maintain control over your company when you bring on an investor. However, do be aware that your investor may decide not to invest if you keep too much power for yourself. Since it is a balance, you having too much power increases his or her risk.

1. An often overlooked aspect of control starts with not allowing anyone into your company that doesn’t match your values. This means researching to find out more about your potential director or investors.

Remember particularly for the directors and the management of the company that this is where decisions about your company are legally made. A director has the authority to bind the company and will usually be able to be nominated as a signatory on the company bank account.

It sounds obvious, but it is important that you find out more about your investors or other directors than just their name and address. As a minimum Google them, check them out on LinkedIn – have there been any complaints? If they have invested in other companies – have they caused any issues? Ask for references. Go to Companies House, check that they haven’t been disqualified as a director. Interview them, find out what makes them tick and make sure that they fit with the culture of your business.

At NaviStar Legal we have developed an investor checklist and director questionnaire so you know you have asked the important questions and help you through this process.

2. Casting vote - Another way to control the outcome at a board level is to ensure that you have a “casting vote”. This means taking control of decisions at the board, so that if there are an even number of votes by directors on a certain matter then you will be able to make the overall decision. It is usual that the Board makes most of the decisions for a company and you don’t want to override your directors – they are there to provide balance and structure to the board - however, in an emergency it may be an important strategic option.  

The casting vote is a change that you will want to incorporate into your company’s articles of association and have it agreed that you are the chairman of the meeting. This is much more difficult if you already have a board in place, but if this is a new company then you can make the rules up front.

3. To maintain control at a shareholder level, provide an investor with non-voting shares.
Offering investors non-voting shares is controversial to the investor community, but it is becoming more popular.

This involves creating one or more new classes of shares for the company in order for some to be non-voting shares. At NaviStar Legal we usually create A, B and perhaps even C class shares, depending upon the variations.

So that is empowering you with some more insight into how to maintain control when you bring investors on board.

Because you do want to stay in control of your business, don’t you?

If your business needs support navigating the world of investment, one of our team would love to speak with you. Call us on 0800 133 7509 OR book a slot to speak with a lawyer here.
Will a legal health check boost my company’s wellbeing?
Sometimes, when you start an exciting venture, it’s all too easy to hit the ground running and forget to stop and check all is well across your business.

Sometimes, the stuff you’re not comfortable with gets forgotten and continuously dropped to the bottom of your list as you focus on the “more exciting things.”

For many entrepeneurs, small businesses and SMEs, adherence to the law is a case in point. It can be confusing, overwhelming, scary and….dare I say it? Boring.

We don’t understand it, so we stick our head in the proverbial sand and hope nothing rears its ugly head at any point.

That’s a plan, right? What can go wrong?!

Well, plenty, if we're honest. But very little that can’t be put right if you catch issues soon enough.
Think of it like going to the dentist regularly. Chances are not much has gone wrong since your last visit. But if it has, they will put a plan in place to get you back on track.

And this is what a legal health check will do for your business.

Don’t give situations long enough to fester and escalate. 

Use our NaviSTAR TIPS to help you decide: Will a legal health check boost my company’s wellbeing?  

What is a legal health check?
In business, a legal health check is a service for SMEs, small businesses and solopreneurs. It evaluates where you stand legally and identifies any issues that may be putting you at risk. 

If you pick the right legal services business to help, what you should receive is simple, clear and actionable advice.

When should you get one?
It’s particularly useful if you’re just starting out and wading through the typical myriad of ‘must do’s. Because details inevitably slide and problems can escalate without you even realising. 

If you fail to recognise the importance of the law and the impact it has on the functionality of your business, it could lead to serious consequences further on in your entrepreneurial journey.

So for the sake of a few pounds and hours, is the risk of not checking worth it?

Even when you’re well on your way to success and have established a rhythm for the daily running of your business, its’s worth taking a heath check every once in a while.

Another good time for a double check on where you currently stand is after a legal problem has been resolved. It will give you peace of mind that you're back on track and minimise the chances of any future nasty surprises.

What should you be looking for?
You should look for a legal services business who provide a bespoke service that can identify the potential issues for your unique business and who don’t take a one size fits all approach. You’ll know you’ve found the right one if they listen to what you have to say and don’t follow a manual or pre-prepared process. It’s unlikely your firm will have the same needs, wants or vulnerabilities as the business next door; a tick box approach is not what you're looking for here.

After the check, you should be left with actions that you can choose - or not choose - to take. There should be no scaremongering of potential consequences if you don’t take the advice offered. A reputable legal services business will guide and nurture rather than terrify with potential scenarios!

What can you expect to receive?
Most legal services businesses who provide legal health checks will offer all or most of the following. But always ask if there’s something you think might help your business.

- A complete check of your terms and conditions
- A thorough examination of any legal issues that are currently impacting your business
- A report displaying the risks you may be facing
- Strategies and advice if you’re looking for do-it-yourself solutions

The above is the minimum and some will offer more, such as a 1:1 consultation with an experienced lawyer. So do check what you need and what you’re paying for.

If you’d like to learn more on whether a health check could be just what the doctor ordered for your small business or SME, why not talk to the team at NaviStar Legal?
Call us on 0800 133 7509 OR book a slot to speak with a lawyer here.
Investment for your SME
Are you an SME considering investment to help you grow?

If so, read on.

At Navistar Legal, we want to empower small business owners to feel confident when exploring the world of investment. When it works well, it’s a boost for your business, but like any major strategic business decision, there are pitfalls to avoid. 

So we have put together this three-part blog series to answer any questions you might have around investment, from the key issues to be aware of to maintaining control of your business to what you need to get in writing.

Part one deals with what to consider when it comes to investment for your SME. 

What do I need to consider before reaching out to potential investors?

When it comes to small business life, cash doesn’t always flow and a lack of cash can inhibit growth. Seeking additional financing from an investor is often a solution. But the first thing to do is to explore options for financing and avoid giving away equity. There are lots of alternative debt and equity finance options. Giving away equity seems easy to do, but it can be more complex than receiving a bank loan and it has higher risks. 

Always explore the options for finance in your business before agreeing to give anything to anyone. 

Next – the million dollar question:

Should I exchange shares in my business for someone else’s work?

It is tempting to save on short-term cash with `sweat equity.” But whilst the skills and connections are useful, it can cost your business in the long term.

Imagine this scenario: you and your two business partners want to set up a limited company. You each take a third of the shares and say that you are business partners. All three of you set out to work, until one day, the coder seems to be taking significant holidays and not doing much work and there is little that you can do about it because he or she already owns his shares. None of you are paid shares and each time you issue dividends he or she gets one third of these and one day, he or she will get one third of the value of the business if you sell. Unless you have a well-thought through shareholder’s agreement, you two are left doing all the work. 

Sound familiar? 

This is the most common scenario that arises when we speak with small businesses about investment issues. 

So when you give away sweat equity make sure of five points:
  • Drip feed equity over time. This is called “vesting’. Shares will vest (be provided to a shareholder) once the board decides they can receive them. This means you remain in control of when they receive shares.
  • Make sure you are able to buy back their shares if they do something (or fail to do something) that they should have done (including that they stop providing services to you). 
  • Make sure that the value of their work is equivalent to the number of shares that you provide. Understand the specifics: how many hours they are going to put in, what results they are going to achieve or how much value that they are going to add during a set time period.
  • ​Never give away equity for a loan. Whilst on the face of it it seems reasonable and you get cash when you need it, you will have to repay the loan and they will keep shares for the lifetime of your business.
  • ​Don’t assume that your staff want shares in your business. Check with your staff first. Sometimes employees would actually prefer extra cash in their paycheck at the end of the month.
You should also check any assumption that an investor wants to receive shares. Sometimes potential investors are happy with a profit or turnover share, which avoids the complexity of the share scenario. 

At the end of day, often a small business just needs a cash injection. So none of these rules are hard and fast. But hopefully this gives you some important points to be considering as you work your way through the investor thought process. 

In our next piece we will be exploring how you maintain control of your business when you give away equity. Stay tuned! 

If you would like to discuss obtaining investment for your SME business, contact inhouse.support@navistarlegal.com to speak with one of our team of legal experts. 
SuperNova: Fostering collaboration in the new legal economy
Written by Jo Rogers on November 2, 2019
Change is here to stay….and you know it. 

We could start this by telling you that the legal landscape is changing fast. 

But you already know that, don’t you? 

As a buyer of legal services, as a legal services business, as an individual working in the legal market, transformation is all around you, driven by technology which is creating a new culture. Legal is no longer an industry, or a sector, but an economy, a marketplace where customer centricity rules above all else.

It’s refreshing, it’s exciting, it’s long overdue and for many, as with all change, it’s daunting. A new economy demands new skills. It is becoming less about the practice of law and more about law combined with business combined with technology. It’s about advice delivered to clients with emotional intelligence, with a real understanding of their pain points. It’s about a desire to find a solution that harnesses all the options that are now available in a new legal economy in terms of people, process and technology.

And as this takes place, there is a word we are coming across more and more.

Collaboration.

Collaboration is creeping into everyday legal narrative, coercing lawyers to step out of their siloes to work with diverse professionals across the business and across the market itself.

It’s about working together to solve problems and design solutions that are truly client centric.

Collaboration, diversity and agility are the new words on the street in this emerging legal economy.

And a new legal economy requires new skills. 
SuperNova – a new learning experience for lawyers 

In response to this need, here at NaviStar Legal we have launched our SuperNova training programme. 

SuperNova is a vocational course designed to equip lawyers with next generation legal skills by working with real businesses. It’s a combination of theory and hands on practical experience, which makes it a new kind of learning experience for lawyers. 

The course is a combination of taught modules and training with course topics that include: how to work with smaller businesses; the basics of legal operations; understanding where to innovate and the barriers that can prevent innovation and high performance leadership. 

Lawyers are also matched with an SME business and spend four hours a month working with founders, directors and board members with the ultimate aim of creating efficiencies within the business and optimising the delivery of legal services. Working with a smaller business forces lawyers out of their comfort zone and idea of how things are usually done, inspiring a more creative approach and way of thinking. They work closely with the C Suite to ‘get out of their swim lane’ and approach legal issues with the client strategy in mind. They develop essential listening skills and the importance of empathy. They learn how to deliver advice in a way that is relatable for the business and not just legal speak. They are able to directly apply new skills and learnings in a business context in a way that traditional courses delivered in-house or in law firms are not able to do. 

We want to empower lawyers to harness new skills, to understand the value they can provide and return to their businesses to bring this value and creativity to their day to day role. Inspired, empowered, engaged lawyers who are not afraid to create and innovate and who will stay with their legal teams and businesses for the long term. 

SuperNova phase 2 – could it be for you?

In September we welcomed our first cohort of SuperNova lawyers from the legal team of a global management consultancy. Now we are looking for lawyers to join our phase 2 cohort. 
We are looking for a mix of lawyers for our second cohort: those from global legal services businesses, boutique legal services businesses, new model firms, large in-house legal teams, small to medium-sized in-house legal teams, those in solo roles, those in consultancy and freelance roles. We believe there is so much to learn in how we collaborate together as lawyers, as a community, to provide our clients with the best solutions. 

As Charles Darwin said: “It is the long history of humankind (and animal kind, too) that those who learned to collaborate and improvise most effectively have prevailed." 

SuperNova training is our pledge to create a tribe of next generation lawyers with a collaborative spirit for the new legal economy. It’s our pledge to grow the legal workforce with talented lawyers who always have their clients front of mind, who know how to focus on their pain points and create the best possible client experience.

Could Supernova be for you? We’d love to discover how it could work for you, for your legal team, for your business. Contact supernova@navistarlegal.com for an initial conversation.

SuperNova – bringing world class legal training to your brightest stars
Written by Jo Rogers on September 23, 2019
SuperNova Story
This month at NaviStar Legal, we are launching our SuperNova training programme, a vocational training course to equip in-house lawyers with next generation legal skills by working with real businesses. 

The training has been inspired through my own career journey from junior lawyer to business owner. 

When I was a junior lawyer, I wanted what every partner had - a plush office in the city, power in a large firm and my name on the door. I thought that working for listed companies and reading the FT was a demonstration of my ‘commercial skills’.

Then I moved in-house. The leaders there inspired me to grow in business awareness. I learned project management and managers showed me different way of thinking. My passion and enthusiasm increased. I thought that my short-form contracts were a demonstration of my ‘commercial skills’.
But it was only when I set up NaviStar Legal and started working with SMEs that my commercial skills really grew. Small businesses are nimble and full of energy. Their working practices allowed me to get deep into the business and add more value in terms of legal advice - because I could see the benefit to their bottom line. It allowed me to develop a true understanding of smaller budgets and to do things differently, more creatively. I was in the trenches, getting my hands dirty, making imperfect decisions and getting the job done! Working with smaller clients gave me the passion and enthusiasm that had been missing and I learned the true need for the ‘human’ lawyer. 

Then I met Mike Harris. Mike taught me Iconic Shift – a set of tools and principles that helps individuals to design, build, run and promote successful businesses. The Iconic Shift team has worked with around 30 businesses in the last five years, creating nearly $1bn of additional value. Using these tools and principles I learnt to better support my SME clients. I went from thinking like a lawyer to thinking like a business owner.

This journey led to the creation of our SuperNova training programme. SuperNova has been designed for in-house lawyers who want to think in a different way and adapt to change: lawyers who are passionate about developing their commercial skills to become a trusted adviser to the business, as well as an expert lawyer. 

SuperNova in a nutshell
SuperNova is a combination of theory and hands on practical experience, which makes it a new kind of learning experience for lawyers. The course is a combination of taught modules and training over a period of 12 months. Some of the course topics include:
  • How to work with smaller businesses: the difference between corporate and entrepreneurial working 
  • Business architecture and strategy: the basics of legal operations and devising a strategy
  • Innovation: understanding where to innovate and the barriers that prevent innovation
  • ​Leadership skills: high performance leadership and embracing your own personal style
  • ​Pitching: engaging the business through storytelling, public speaking and advocacy
Lawyers are also matched with an SME business and spend four hours a month working with founders, directors and board members with the ultimate aim of creating efficiencies within the SME and optimising the delivery of legal services. Working with a smaller business forces lawyers out of their comfort zone and idea of how things are usually done, inspiring a more creative approach and way of thinking.

Interested? 
I am truly passionate about SuperNova and the difference it can make to in-house lawyers, the businesses they work for and the SMEs they train with. We want to empower lawyers to understand the value they can provide and return to their businesses to bring this value and creativity to their day to day role. Inspired, empowered, engaged lawyers who are not afraid to create and innovate and who will stay with your legal team and your business for the long term. 

If you are General Counsel who is interested in upskilling your legal team via an innovative training solution, I’d love to speak with you.  

If you are an in-house lawyer who likes the sound of our vocational training course, we’d love to speak with you too! 

Drop me a line on here or contact supernova@navistarlegal.com
Do you rely on a Lucky Eight Ball when making investment decisions?
Do you rely on a Lucky Eight Ball when making investment decisions?
Written by Jo Rogers on May 13, 2019
Five NaviSTAR TIPS to help you decide: Which type of investment is right for you: Debt or Equity? 

For many SMEs, getting expert help to make important decisions is not only sensible; it can make the difference between success and failure. Especially when it comes to financing, and in particular, investments.
Just because you run a business does NOT mean you are expected to know everything. Therefore, take every offer of expert advice you can. Paid or unpaid, it doesn’t matter as long as the giver of the advice is credible and experienced. If not, then you may as well use that old favourite – the Lucky Eight Ball.

If you want to fail that is!

However, for more extensive, yet comprehensive advice; download the Navistar Legal ‘Raising Investment’ e-Book now. It’s a handy guide full of sound advice to help you find the financial confidence to grow your business.

But if time is short today, then here’s a summary of the first points to remember when deciding which investment is right for you. 

1. Know the difference 

Debt investment
Debt investment involves borrowing a fixed sum from a lender, such as a bank; which is then paid back with interest. The funder is usually referred to as a ‘creditor’ or ‘lender’. Debt is a great option if your company credit score is acceptable. Bear in mind, however, that a personal guarantee or security, often in the form of property or assets, will be required.

Equity investment
Equity investment is the transfer of funds to the business, in exchange for some form of percentage ownership – usually shares. This type of investment can take the form of several smaller investors, sharing the company out accordingly; or one large investor with whom you would negotiate a percentage ownership of your company. Note: There is also a hybrid of the above. 

2. Ask powerful questions 
As explained above; when we talk about ‘raising investment’, we are usually talking about debt (borrowed money) or equity (ownership).

Not everyone will have the financial expertise to know what’s right for each situation. If you can’t access legal help straight away, then do make sure you fully equip yourself with as much knowledge about your lender or investor as possible; before committing.

And remember, the source of funds can often be as important as the types of funds. And relationships with either will be inevitable. Therefore you need to check, check and check again. Remember, you’re not looking for friends here. You’re looking for professional, experienced lenders or investors who will ideally have the same business ethos as you and a credible track record of lending or inputting value to a business.

The investment you accept must be free from emotion: and all about the benefits the investor can and will bring to your business. So you must know who you are ‘jumping into bed with’. It was investor, Entrepreneur and Financial Advisor Robert Kiyosaki who said on Twitter “In the world of money and investing, you must learn to control your emotions”. That’s true from both sides of the equation: both for the investor and the company looking for investment.

3. Do you need more than money?
A lender will usually be happy to allow you to run your business as you wish; making all your own decisions as you go. After all, you will be repaying them all monies loaned, plus interest, regardless of whether your business succeeds or fails. Sad but true!

Whereas equity investors often fall into two categories. Those that want to get fully immersed in your business and those that don’t. Those that want to be involved may look to influence business decisions and company direction; often attending meetings. The benefit to this type of investor is the wealth of expertise and experience they can bring to the business; including their many contacts. Often they have been through most of the scenarios or ‘bumps in the road’ you may encounter on your business journey and can advise accordingly.

The other ‘variety’ are usually happy to invest their money and, hopefully, watch it grow. But from a knowledge resource angle, you’re still pretty much on your own…unless you are not providing a return on their investment of course. Then questions may be asked. Therefore it’s always advisable to give realistic timeframes for their financial returns and agree on these at the start.

Think carefully about what you want; and always refer to point two (above). Ask questions, conduct extensive research and complete due diligence. This is YOUR business and YOUR future. What type of investment or shareholder is most likely to grow your business in the way, and at the speed you desire?

4. Which is the more cost-effective choice?
Okay, this may seem like a non-answer. But the decision really has to be based on your individual requirements. Only you know your end goals and your particular finances. And you need to go through all the above to help form your final decision.

Our advice here is that it may be prudent move to invest in some financial advice at this stage too as your finances may show one decision is better than another. Consider your internal resources too, as in point three. Because an extra business head, with a vested interest, can sometimes prove invaluable. But you need to weigh this up against the possible loss of control you may keep over your business.

On the other hand, a straightforward injection of cash could be just what you need to propel your ideas and your business forward. If you have a good credit rating, an excellent business plan, sound projections and passion for driving your business forward, then debt investment may well be the right decision for you. It’s often simpler; and once it’s paid, it’s paid. It also allows you to keep your business firmly…well, yours. And don’t listen to Bob Hope! “A bank is a place that will lend you money if you can prove that you don’t need it.” – Bob Hope

5. Alternative options 
You may decide, after reading this article, that neither equity nor investment financing sounds like the right fit for your circumstances. Possibly the answer for you could be a loan from family or friends, using your credit cards; or simply a straightforward bank loan. Even pensions are, subject to terms and conditions, a viable option for raising funds for your business.

There are many financial opportunities available; with many investors only too happy to support those that need it. And banks with money to loan to a credible company with a viable future. What’s important, is to know which type will help your business grow. And digesting our 5 Tips to help you decide which type of investment is right for you: Debt or Equity? - will enable you to start asking the right questions; narrowing the choices down towards the right one. And if you can’t decide, don't be tempted into throwing that Lucky Eight Ball.
Will using Sweat Equity bring you out in a cold sweat?
Will using Sweat Equity bring you out in a cold sweat?
Written by Jo Rogers on April 12, 2019
Five NaviStar tips to help you decide: Is Sweat Equity right for your business?

For many SMEs, getting expert help to make important decisions is not only sensible; it can make the difference between success and failure. Especially when it comes to financing, and in particular, investments.
A popular investment choice for startups with limited cash flow can be Sweat Equity. It’s a nonmonetary contribution that individuals or the founders of a company make towards the company, in exchange for shares in the business. But is it right for you?

We offer a complete guide to all investment options in our e-book 7 Steps to Raising Investment On Your Terms including Sweat Equity.

But for a quick, at a glance guide to Sweat Equity alone, we’ve listed some do’s and don’ts’s when considering it as an investment option.

1. Don’t expect to eat from the service counter for free!
Have you heard the phrase “there’s no such thing as a free lunch?” This statement could very easily apply to Sweat Equity; because while skills and connections are very useful; getting services for “free” may cost you more in the long-term. Many considerations should take place before progressing with a Sweat Equity option. Not least of all, who you’re connecting with. We assume we know a person and they’d be ‘wonderful’ to work with. But situations can change and the rosy glow and excitement may not last! Consider what you expect from any collaboration – in as much detail as you can. REALLY run it through from every angle. And do the same when considering what you offer in return. Do the equations balance?

2. Do put a legally binding agreement in place for any transactions – cash or otherwise
Can you imagine the scenario where you’re excited about your new company and the support friends or former colleagues are offering? You register as a Limited Company and they agree to invest their time in helping you start and grow your business in exchange for shares. Fantastic, because you all recognise the business has great potential and is likely to grow big. So you split the shares equally and agree to split the workload accordingly.

But, for whatever the reason (and we’ve heard many!) one, or if you’re very unlucky, several of your ‘investors,’ start to drift. The balance of work starts to shift and you find you’re doing the lion’s share of the work most days. The bad news? They still want the shares you agreed at the start and there’s little you can do about it unless you were wise enough to put a well-thought through shareholder’s agreement in place at the beginning of the venture.

3. Do apply real-world value to sweat equity
Knowing the value of the Sweat Equity provided to your business is crucial in determining the true value of the shares owed to investors.

The easiest and most accurate way to do this is to find out what each person would have been paid if he’d completed the same work for another company.

Remember though, that usually sweat equity contributes to the value of the company in more ways than ‘worked hours’ alone. And, depending on your specific industry and your company situation, it’s often necessary - and appropriate – to attribute additional monetary value alongside the basic labour costs.

4. Don’t forget taxes
It can be a common mistake to assume it’s not necessary for you, or the recipient of the shares, to pay taxes. That may not necessarily be true. So be sure to check in each circumstance. Even though money is not likely to be involved in Sweat Equity arrangements – there may be tax consequences and the ‘tax man’ will want to know! Full disclosure is always advised in any situation.

5. Do think carefully about which skills matter to your business
Establish where your skills are lacking or can be enhanced or bolstered. Then actively look to recruit Sweat Equity collaborations to fill those gaps. It could make the difference between success and failure when growing a new business.

Sometimes when you’re short on cash - and most startups will identify here! - Sweat Equity is a tempting option. And although there are indeed some pitfalls to be aware of it can also have some distinct advantages. When possible, always seek advice.

You can purchase 7 Steps to Raising Investment On Your Terms a comprehensive round-up of advice on investment options here.
What is Affordable Wisdom? Vanessa Vallely explains
What is Affordable Wisdom? Vanessa Vallely explains 
Vanessa Vallely is the Managing Director at We Are The City, a “free, centralised hub for professional women who want to progress in their careers, enhance their skills and build their external networks.” By helping women develop professionally and personally, this site is a valuable tool for individuals here in the UK and in India. She defines Affordable Wisdom as the desire to access the skills and capabilities that one needs to advance their career at a price that is reasonable and achievable. 

This can include reaching out to existing networks to learn from mentors or seeking the skills from more traditional training methods. Simply put? Affordable Wisdom relies on “advice, experiences and stories from role models that can help me.”
Anna Margolis and the importance of a systematised model
Anna Margolis and the importance of a systematised model 
Anna Margolis is the CEO and founder of Start Out Steps, an innovative “business starter system that combines affordable professional coaching and basic online learning to enable you to live life authentically and make a comfortable living doing what you love.” 

She helps people to start businesses with clarity and confidence, and she defines Affordable Wisdom as collective, accessible wisdom that is available to all. A voracious lifelong learner, she stresses the importance of searching for wisdom and heading out to seek it. She advises lawyers and accountants to think of wisdom in a more systematised way that will enable more people to access valuable tools. 

Rather than thinking solely about billable hours, think instead of providing a model that others can replicate. Watch more of these three incredible ladies here.
Nicky Armytage, an Electric Woman inspiring other women
Nicky Armytage, an Electric Woman inspiring other women 
Nicky Armytage is the founder of Electric Woman, a coaching service that aims to empower women through mentorship. 

“Electric Woman provides coaching for individual clients, coaching workshops and has a thriving global community 'Be Electric' with monthly events. The Electric Woman coaching journey guides women through practices of self care, vulnerability, intuition, visioning – and being fearless.” In our interview with this powerful role model, she elucidated some very important points about Affordable Wisdom: 

- What are you ready for? 
- What can you afford? 
- Are you ready to connect to your inner wisdom? 

She describes investing a large sum of money into a leadership course in the US, and how she was able to tap into her inner wisdom and “clarity of nourishment” while learning from the others around her. Her top tips for lawyers and accountants include listening to those who are in front of you and helping others connect to their own internal wisdom. You should always be looking for the light and the seed within them – help them reach their own potential. Watch more here.
Often a person putting something in writing is the person that holds the power.
Written by Jo Rogers on April 10, 2016
You are literally writing (or re-writing) history.

Putting notes in writing (ideally sharing it with the other person) is a simple way to avoid issues in the long run and to commit your version of events. Here are there are three good reasons why putting something into writing is important for your business:

- Clarity. Putting the terms of an agreement into writing gives all parties a greater level of clarity and understanding.
- Record. It acts as a record and a reminder of what was agreed at the time.
- Evidence. It acts of evidence of what was agreed and prevents having to defend your word against someone else’s.

A warning!

It may seem obvious but having something in writing is not a substitute for trusting someone.

If you wouldn’t trust someone on a handshake - perhaps you shouldn’t enter an agreement with them at all, written or otherwise!
SMEs are being advised to take care of the legal needs - Is the law industry ready to help them?
The below is an article written by LawyerFair : A legal comparison service for business owners.
Your SME set sail on that once in a lifetime cruise to something tropical, only to suffer a major collision with the accounts department of a large, non-paying customer.

And so, shipwrecked upon that desert island (OK, we do accept this is a slightly contrived introduction but hey, it’s all about the headline baby …) you start thinking about the things you’ll change when you finally get back to the office.
Funnily enough, one of the few possessions you managed to keep above the waterline was a copy of research undertaken by the Legal Services Board, illustrating that the most common legal issues for SMEs related to business set up, agreements, tax and regulation. 

As the sun blazes down on another day of just you, the ocean and some seagulls, you reflect upon the fact that 46% of business owners say unaddressed legal issues adversely impacted the business, at an average financial cost of £13,812 per issue.

Taking advantage of this enforced period of reflection, what are the 5 legal tips you’d most like to address when you get back?

Legal Tip No.1. Double check your legal obligations

Most legal problems are avoidable and one way to protect yourself is conduct an audit relating to the legal obligations of your business to customers and staff including issues relating to:

Tax and National Insurance
Employment Contracts for Employees
Regulations Specific To Your Trade or Business Activity

It is essential to ensure best practice if you think your business might be vulnerable, seek advice that helps take an objective perspective.

Legal tip No.2. Take control of your legal documents

Similarly, your business should always ensure you fully understand rights and obligations before signing or agreeing to anything. This is just common sense and applies to:

Leases/Tenancy Agreements
Contracts for the supply of goods or services
Employment contracts

Making sure these documents are in good order and have kept pace with the development of your business i.e. are those contracts still sufficient?

Legal tip No.3. Get best value from your professional advisers

As part of the audit process, it’s also useful to assess the value being delivered by your professional advisors and measure whether you have the right people in place. Is the solicitor or firm you’ve always used able to help your growing business? Is the accountant you started with, capable of helping you make the right decisions as you scale your business?

The modern culture of running a business is much more able to benchmark the performance and value being delivered by their advisors. Make sure you undertake this process before, you find out they’re not longer the right fit for your business.

Legal tip No.4. Protect your Intellectual Property rights

Many businesses do not have the requisite knowledge to make informed decisions about protecting their intellectual property rights. As of October last year, IP laws were amended under the Intellectual Property Act 2014. The Act was intended to simplify UK legislation and bring the national framework in line with European law; strengthening protection for the UK’s innovative businesses and protecting a £15 billion design industry. Important changes included permission for the UK to join the Unified Patent System, the definition of a design to which unregistered rights may apply, the ownership of design rights and certain exceptions from the infringement of unregistered designs. The Act contains robust sanctions too as infringing design law can now amount to a criminal offence with up to 10 years imprisonment!

The ability to now register designs across multiple countries through a single application will assist businesses obtaining design registrations both quickly and cost effectively.

Legal tip No.5. Due Diligence Everyone

Marry in haste; Repent in leisure …. many legal problems emerge from commercial relationships gone wrong and so, you should always be very careful who you get into bed with and make sure you’ve conducted sufficient DD to minimise against the risk of a problem emerging in the future.

With recruitment, no matter how desperate the need … make sure you recruit individuals who will strengthen the team and adopt the maxim, “if there is any doubt, there is no doubt”

With contracts & agreements, check the background of who you’re dealing with and their other commercial relationships. It may sound like a wonderful order but it won’t be if they renege on the terms, and have a track record for doing so.
Photo by Engin Akyurt from Pexels
Navistar Legal is very pleased to announce we have been shortlisted for three awards in 2015
Written by Jo Rogers on August 25, 2015
Founder Jo Rogers is out to change the legal industry for good.

Navistar Legal has been shortlisted for three prestigious awards for its innovative approach to legal care: The Best Client-Facing Business Development Campaign and The Best Alternative Pricing Model awards in The Lawyer Business Leadership Awards 2015, and the Excellence in Business Development award in The Law Society Excellence Awards 2015.
The shortlisting comes just months after founder Jo Rogers set out to shake up the legal industry and provide much-needed legal care to small and medium sized businesses.

“So many SMEs are stuck in the terrible position of being unable to afford basic preventive legal care, and being even less able to afford the expensive legal support they’ll need if something goes wrong,” Jo said. “This inspired me to create an entirely new type of law firm based on the concept of affordable wisdom — the belief that every business owner should be able to easily access legal wisdom they need at a rate they can afford”.

Besides launching a range of new services for SMEs, Jo has engaged the legal community in a discussion of client care to raise awareness of the affordable wisdom standard with the Affordable Wisdom campaign: a series of 15 short, valuable videos including interviews with Ken Olisa, OBE; iPEC London director Anna Margolis; and VP legal of Coca-Cola Paul van Reesch, among others.

“I’m incredibly proud of what we’ve accomplished in the past year, and I’m so honoured to have been shortlisted for the awards — but this is just the beginning. I want to permanently change the face of a traditionally soulless profession into one of meaning, service, and creation by creating a new generation of lawyers espousing the affordable wisdom standard”.
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