PwC's looks like equity, acts like equity, but not equity startup agreement
When is something that looks like equity and acts like equity not actually equity? When it’s a “joint engagement relationship” between PwC and a startup client.
When is something that looks like equity and acts like equity not actually equity? When it’s a “joint engagement relationship” between PwC and one of its startup clients.
Professional services giant PwC has been in the firing line for months over a much-publicised tax leaks scandal, which has sparked widespread concerns about its cosy relationship with government. But the firm has also looked for growth in recent years by aggressively courting the startup sector.
Capital Brief has obtained a 10-page agreement between PwC and New Zealand based legal software startup LawVu which uncovers an unusual commercial arrangement between the two, with the benefits appearing to be tilted in the accounting behemoth's favour.
Under the agreement from 2019, which could only be disclosed to potential LawVu investors with PwC's approval, PwC would exchange its services in return for fees that were only due at a liquidity event (that is, a sale of the business or IPO).
