If you have raised venture capital in India in the past few years, you have surely asked yourself the question, “Should I be raising venture debt as well?”. Venture debt, as the term suggests, is a form of risk financing through debt rather than equity. In India, it...
As an investor, some investment journeys are a delight to watch – Whatfix has been one of them. They have just concluded their Series B round, where Whatfix welcomed three exceptional new investors – Eight Road Ventures, f-Prime (a Boston based firm) and Cisco....
Have you heard the cobra story? The story goes like this – there were a lot of cobras in Delhi and to kill them, the British rulers announced an incentive per killed cobra. Did it have an effect? Absolutely! Many cobras were killed and a lot of money was paid out. But...
Anant, one of my uncles, went through a varicose-veins surgery recently. While the surgery was successful, our overall experience was horrendous. Our first challenge was to find the right hospital. Since none of the larger hospital brands cared for small cheque...
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...
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.
