As investors, we are asked several times a month – “How do you decide which start-up to invest in?”. Despite the universal truth that the market trumps everything else, we all invest first and foremost behind great teams, market be damned. However, we usually fail to...
Back in the summer of 2009, we had an energetic young guy from Wharton turn up for an internship. He was smart, ever smiling, and possessed strong entrepreneurial desire. Along with being involved with one of our portfolio companies, he was researching the idea of...
I hail from a town called Kota which is now famous for being the education capital of India. Back when I was young, it was a sleepy town with a population of 5 lakh. In our colony, I remember, there used to be these entrepreneurial women who would use their sourcing,...
Many entrepreneurs assume VC firms are monolithic entities with a uniform “firm view” on most topics. Nothing could be further from the truth. Our investment horizons are so long, and the markets we invest in so uncertain, that it is impossible for all of us to agree...
India trades around $300 billion of retail products every year. While people talk about companies owning distribution chains, more than 70-80% of retail goes via the wholesale route. In addition, we are home to more than 12 million retailers and 1 million sellers. Due...
The Company and the Founders shall complete an initial public offering or a ‘strategic sale’ within 5 years from the Closing Date (“Exit Date”) on terms that are acceptable to the Investor. The failure of Company and Founders to provide an exit by the Exit Date shall not relieve the Company / Founders of their obligations to provide an exit to the Investor, which shall continue until the Investor ceases to hold any shares. In case of failure to provide exit, the Investor shall inter-alia have a drag along right on all other shareholders of the Company.
Liquidation Preference
Higher of 1x or pro rata entitlement on an as-if converted basis in any liquidity event. Liquidity event shall be defined in the definitive documents and will inter alia include change in control or sale of substantially all of the assets of the Company.
Pre-Emptive Rights
The Investor shall, in any subsequent offering of securities by the Company, have a right to maintain their shareholding in the Company. [Note to Draft: Any super pro rata rights will be over and above this and should be included here]
Valuation
The valuation section concerns what an investor believes the company is worth. valuation issues addressed in the term sheet will include: pre-money valuation, post-money valuation, capitalization table and price per share.
