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Skin in the game – Simmons launches ‘fund’ to back fintech stars with free advice

With law firms scrambling to build links with the much-hyped fintech sector, Simmons & Simmons has put its money where its mouth is with the launch of a £100,000 ‘fund’ offering free legal advice to promising start-ups.

The S&S FinTech Fund is touted as the first of its kind in the legal industry, with Simmons hoping that offering free legal advice to promising start-ups will lead to strong relationships with fast-growing clients.

The idea is the brainchild of Simmons partner Angus McLean, who spotted that fintech start-ups often face tough legal issues during their infancy given the increasing regulatory burden on finance providers.

McLean, who leads Simmons’ fintech team, said: ‘Early stage fintech businesses in the UK currently face challenges finding the right kind of legal support. Our vision is to help promising start-ups solve challenging legal or regulatory problems that could otherwise slow down their development or, in some cases, prevent them from getting off the ground at all.’

The fund commits £100,000 a year to help up to four UK fintech start-ups through the provision of free legal advice. The fund will provide legal advice worth up to £33,000 per client annually, with the expectation that Simmons will work with three or four selected clients. The firm does not expect to take equity in return for providing that advice.

Simmons is tapping into a booming marketplace, with global investment in fintech up 75% in 2015 to $22.3bn, according to consultancy Accenture. Fintech has become one of the darlings of the UK economy, given London’s strong financial platform and focus on technology. The UK industry generated more than £6bn in revenue in 2015, according to EY.

To qualify for support via the fund, fintech businesses will have received no more than £1m of investment and been accepted onto one of the leading UK fintech accelerator programmes or been referred to Simmons by an established fintech-focused venture capital investor.

The unusual attempt to share risk with tech-driven clients loosely echoes the practice pioneered by a handful of major law firms in the late 1990s boom of taking equity stakes in return for offering free legal advice. The tactic, which was most prominent among Silicon Valley advisers but also extended to some City law firms, has become less common in recent years.

However, this move will be seen as a symbolic statement of commitment by Simmons for the much-touted sector, which is typically driven by entrepreneurs rather than institutional banking groups.

Simmons managing partner Jeremy Hoyland (pictured) added: ‘The firm already acts for some of the leading fintech businesses in the UK. The fund will allow us to use our specialist expertise to contribute meaningful support to the UK fintech sector, while also building strong relationships with the next generation of exciting businesses.’

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