Business Development Companies: An Alternative Capital Source

Evaluating and Using BDCs to Finance Business Ventures

Recording of a 90-minute CLE webinar with Q&A

Conducted on Tuesday, October 6, 2009

Recorded event now available

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Program Materials

This seminar will review Business Development Companies, which are re-emerging as a capital-raising alternative for businesses. The panel will offer strategies for taking advantage of opportunities while minimizing legal risks for finance attorneys and counsel to private equity and venture funds.

Description

Businesses seeking capital are exploring Business Development Companies (BDCs) as a source of alternative funding since traditional bank and private equity financing is still unavailable.

BDCs offer a number of potential benefits. Investors can reap high potential yields and immediate liquidity through listed securities, while sponsors benefit from permanent capital and an established regulatory framework.

While BDCs can be an appealing option in the current environment, they are complex entities subject to SEC regulation and fraught with legal risk. Counsel advising investors must consider whether BDCs are suitable, and counsel for issuers must structure BDC offerings with great care.

Listen as our panel of experienced securities and tax attorneys explains how to take advantage of BDCs to raise capital for businesses and offers strategies for structuring financing deals while minimizing legal risks.

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Outline

  1. Overview—what is a BDC?
    1. Becoming a BDC
    2. Types of investments
    3. Tax treatment of BDC
  2. Affiliate transactions
  3. Restrictions on investment practices
  4. Fees
  5. Disclosure requirements

Benefits

The panel will review these and other key questions:

  • What benefits and risks do BDCs offer as an alternative source of financing for businesses seeking capital?
  • What are the unique SEC requirements applicable to BDCs?
  • What best practices should counsel apply in representing BDCs and investors in BDC share offerings and debt financings?
  • What are the key tax issues to understand and consider when using BDCs?

Faculty

Thomas J. Friedmann
Thomas J. Friedmann
Partner
Dechert

Mr. Friedmann is a Partner in the firm's Corporate and Securities Group and focuses his practice on the...  |  Read More

Cynthia M. Krus
Cynthia M. Krus
Partner
Sutherland Asbill & Brennan

Ms. Krus advises clients on a variety of corporate transactions including mergers and acquisitions, proxy contests,...  |  Read More

James G. Silk
James G. Silk
Partner
Willkie Farr & Gallagher

Mr. Silk has a broad corporate practice with particular focus in the investment management area. He counsels investment...  |  Read More

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