MGCS Industry Insights – Jaffe Redoubles its Efforts to Engage and Advise Entrepreneurial Michigan Companies

Shannon Beeman
April 27, 2016

Michigan Growth Capital Symposium Zell Lurie Institute Ross School University of MichiganThe proliferation of entrepreneurial companies in Michigan has prompted Jaffe Raitt Heuer & Weiss, P.C. to expand the legal resources and reach of its Emerging and Growth Business Practice Group in recent years.

“We’ve had a long history of representing early-stage companies and working with them throughout their business life cycles, from raising seed money through their ultimate exits as a sale or an IPO,” says Jeffrey Weiss, a partner in the law firm’s Southfield office. “Now we are making a concerted effort to get in front of more inventors and technologists who are starting these companies, as well as investors, and to become more visible in their communities, so we can get in the door at an earlier stage.” As an entrepreneurial-minded law firm, Jaffe has demonstrated greater flexibility on hourly fees and a willingness to work out creative solutions that accommodate the legal needs and financial constraints of early-stage start-ups, he adds.

Last year, Jaffe represented a long-term client, Delphinus Medical Technologies, Inc., headquartered in Plymouth, Mich., in a $39.5 million Series C round of financing, which closed in August. It was the single largest amount of venture capital ever raised for a health-care imaging company in the Midwest and for a medical-device company in Michigan, according to Weiss, who received his BBA and his law degree from the University of Michigan. In other high-profile matters, the firm also represented each of HandyLab and Accuri Cytometers in recent acquisitions by Becton, Dickinson and Company and assisted ePrize when it was sold to Catterton Partners, a consumer-focused private-equity company, in 2012.

Weiss customarily encourages entrepreneurs to bring in experienced legal counsel as soon as they have developed a business concept. There are several key reasons for this engagement early in the business life cycle:

  • Intellectual-property protection – “As an entrepreneur, you want to protect your idea and know-how immediately,” Weiss says. “The passage of time only hurts you.”
  • Business structure – “Structuring the company properly from a tax standpoint is critical at the outset, and clearly documenting all aspects of the operation of the business, from ownership to employment and other matters, only helps avoid problems down the road,” Weiss explains. “If there’s ‘too much hair on the deal,’ it will pose difficulties later on.”
  • Venture financing – “Entrepreneurs want to be sure they are presenting a nice neat package to a potential financing source,” Weiss remarks. “We help companies best position themselves for financing and resolve any legacy issues. Financings can be difficult at any stage, and we want to minimize such difficulties, so that a lender or investor can understand the opportunity as quickly and easily as possible.”

Jaffe is a regular sponsor of the Michigan Growth Capital Symposium, where many of its clients are among the start-up companies making pitches to investors. “It’s a good networking opportunity for us,” Weiss says. “We find it helpful to know all the players in the area, both on the company side and the investor side. This helps us generate deal flow.”

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About the Michigan Growth Capital Symposium (MGCS)
MGCS is the original university-based venture fair, which was first held in 1979. This nationally attended two-day event provides an opportunity for investors to connect with up-and-coming Midwest businesses and learn about emerging technologies. The Symposium offers the opportunity to build relationships with an unparalleled business network of distinguished private equity industry leaders, leading university research faculty, and entrepreneurial business professionals. MGCS is presented by the Center for Venture Capital & Private Equity Finance at the University of Michigan Ross School of Business with support from the Michigan Venture Capital Association.