Login
Melbourne firm to give employees access to start-up investments
Corporate boutique Coghlan Duffy + Co has established an employee investment fund, funded by firm revenue, to give its employees access to start-up investments.
Jerome Doraisamy
Under the initiative, the Melbourne-based firm – which services start-ups and listed companies “from idea to IPO” – is set to direct a proportion of its annual revenue towards start-ups and venture capital funds, for the benefit of its employees.
To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
Employees will be eligible to share in any upside in the firm’s investments without putting their own cash at risk, Coghlan Duffy + Co said in a statement.
The concept, the firm went on, has been constructed as a "side car fund", so as to give employees access to the same investment opportunities that are available to the firm’s leadership team, thereby providing an additional potential source of reward beyond existing salary and bonus schemes.
Speaking about the new fund, firm director John Coghlan said that it is a “compelling proposition” for current and prospective employees, offering them a “unique form of incentive”, particularly in an increasingly competitive professional services marketplace.
“We aren’t aware of any other firm (at least in Australia) that offers a similar model,” he said.
“We would be elated if our employees joined with us in a profitable pay-day from the fruits of our investments. It’s a great time to invest and we want our employees to be part of the journey that the firm, and many of our clients, are on.”
Initially, the firm will provide seed funding of $50,000 to the fund, and it is committing at least that amount annually – if the fund proves successful.
As a firm that is immersed in the start-up and entrepreneurial space, Mr Coghlan noted, it receives many opportunities to invest in start-ups and VC funds.
“We were always attracted to the Silicon Valley law firm tradition of investing in start-up clients. That made sense to us as a way of supporting the ecosystem in which we operate, while positioning ourselves for returns over and above our fee for service model,” he said.
“While our leadership team has capitalised on those opportunities, it hasn’t been possible to open them up to our staff more broadly. Hurdles such as disclosure laws, sophisticated investor tests and minimum cheque sizes make it hard for our staff to participate in these investments.”
To overcome the barriers to entry for our employees, Mr Coghlan went on, the firm decided to set up a fund “that uses our money (and not theirs) to give them access to these investments”.
The fund will soon make its first investment in a local venture capital fund, with further investments expected in the coming months.
Speaking to Lawyers Weekly, Mr Coghlan said that if the fund achieves what the firm is hoping for, in terms of incentivising existing and prospective staff, “then we will invest more into it by way of funds and internal resources”.
“We’ve designed it deliberately so that our team participates directly in reviewing and assessing investment opportunities. We want our team to have real world experience in the ecosystem to complement their delivery of services to our clients,” he explained.
“We see this as a unique opportunity to give them that experience together with access to potential returns that they can use to enhance their own lives and financial circumstances.”
