LAW4671 - Private investment law - 2018

This unit discusses the nature and operation of private investment law in Australia. It examines how Australia's legal and taxation systems deal with venture capital and private equity investment. It also examines how the venture capital and private equity industries operate in Australia and in various jurisdictions around the world and how private investments funds are structured. It focuses on the taxation treatment that applies to such investment and discusses relevant capital raising and other regulatory matters, including crowd source funding. It also examines international aspects of private investment law and compares Australia's regulatory and tax rules to those of selected foreign jurisdictions. A range of government tax and other incentives that encourage investors to commit capital to innovative start-up companies are also analysed, along with some incentives that reward these high-growth companies undertake innovative activities such as research and development (R&D). Australia's superannuation system is also considered, with a particular focus on its relationship and interaction with private investment law.

The following topics will be covered in the unit:

• An introduction to the operation and nature of private investment law and how the tax system deals with private investments;
• The role of start-up companies and venture capital investment in a country's innovation system;
• Stages of venture capital and private equity investment (i.e., seed, start-up, early expansion, growth, mezzanine, distressed buyouts, etc);
• Making and exiting investments in start-up and early stage companies (including IPOs, trade sales, management buyouts, leveraged buyouts and share buybacks);
• The structure and operation of venture capital, private equity, fund of funds and other collective investment vehicles and their treatment under the taxation law;
• Capital raising issues confronting high-growth start-ups, including crowd funding issues;
• The role of Australia's employee share scheme regime in supporting innovative start-ups;
• Government programs aimed at encouraging venture capital and private equity investment in Australia, including the Pooled Development Funds, Venture Capital Limited Partnership, Early Stage Venture Capital Limited Partnership and Innovation Investment Fund programs;
• Australia's R&D Tax Incentive program and R&D and commercialisation grant programs;
• International programs aimed at stimulating venture capital and private equity investment, and a comparison of these programs with those operating in Australia; and
• The operation of Australia's superannuation system and its relationship with venture capital and private equity investment.

On completion of this unit, a student should be able to:

• demonstrate a solid understanding of the nature of venture capital and private equity investment law in both Australia and overseas;
• understand the fundamental principles underpinning the regulation and taxation of venture capital, private equity and superannuation investment;
• understand how a range of different private investment funds are structured;
• appreciate the policy intent, operation and effect of Australia's Government programs that incentivise venture capital and other forms of investment in innovative companies; and
• meaningfully compare and contrast Australia's private investment and taxation rules with those of certain other foreign jurisdictions.

Group research paper (2500 words): 50%

Take home examination: 50%

Students will be required to attend 36 hours of seminars, and undertake approximately an additional 108 hours of private study, including reading, class preparation, assignment preparation and revision time over the duration of the course.

See also Unit timetable information