Fundraising and M&A

Our expertise in structuring and negotiating transaction agreements ensures every aspect of your investment is carefully addressed. By reducing the risk of disputes and streamlining the transaction process, we help protect your interests and facilitate smooth, successful deals.

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Services Offered

Term Sheets: Preparation and review of term sheets outlining key terms and conditions of proposed investments before formal agreements.
Shareholder Agreements: Drafting and negotiating the clear terms in relation to management of the Company and inter se rights between shareholders, such as voting rights, board rights, exit rights, transfer rights, etc., under Shareholders Agreement.
Share Purchase Agreements: Drafting and negotiating the terms of share transfers, advising on risk mitigation measures in relation to past losses or non compliances, assisting with stamp paper procurement and closing compliances such as Form SH-4.
Escrow Agreements: Secure handling of funds and securities with well-structured escrow agreements, providing peace of mind during transactions specifically in the transactions with consideration being released in a deferred manner.

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FAQs on Fundraising and M&A Services

What is a cap table?

A cap table is a detailed record of all shareholders, their shareholding amounts, and percentage ownership on a fully diluted basis.

Are there any compliances required during an investment round?

Yes, compliances include board and shareholder resolutions, filing forms with the Registrar of Companies (RoC) such as Form MGT-14, PAS-3, circulating PAS-4 to investors, and RBI filings like FC-GPR or FC-TRS for foreign investors.

What types of securities can a company issue to incoming investors?

Companies typically issue Convertible Notes (CNs), Equity Shares, Compulsorily Convertible Preference Shares (CCPS), or Compulsorily Convertible Debentures (CCD) to investors.

What is the typical process in an investment round?

The process generally begins with signing a term sheet between the investor and the company, followed by investor due diligence. Upon satisfactory due diligence, the parties execute transaction documents, fulfill conditions precedent, transfer funds, and issue shares accordingly.

What documents are typically involved in a fundraising transaction?

A fundraising transaction usually involves documents such as the term sheet, Share Subscription Agreement (SSA), and Shareholders’ Agreement (SHA). If the transaction includes a secondary investment via exit of an existing shareholder, a Share Purchase Agreement (SPA) is also executed.

Does the SHA need to be on stamp paper?

Yes, SHA should be executed on stamp paper with appropriate stamp duty paid as per the respective state’s laws.

Can the SHA be signed digitally?

Yes, digital signatures on SHA are legally valid.

What exit mechanisms can a company offer investors?

Common exit routes include initial public offerings (IPO), third-party sales, strategic sales, or buybacks.

What rights do investors commonly seek in a SHA?

Investors often seek information rights, pre-emptive rights for future rounds, transfer rights, exit rights, and liquidation preferences.

Do all shareholders need to be parties to the SHA?

Ideally, all shareholders should be parties to the SHA for enforceability. Alternatively, in cases of many shareholders, authority to execute on their behalf can be delegated to a representative.

Who are the typical parties to a SHA?

Usually, the company, promoters, incoming investors, and existing shareholders execute the SHA.

Can the SHA be signed digitally?

Yes, digital signatures on SHA are legally valid.

Does the term sheet need to be on stamp paper?

No, a term sheet does not require stamp paper.

What is the difference between pre-money and post-money valuation?

Pre-money valuation is the company’s value before investment, and post-money valuation is after factoring in the investment amount:
Pre-money valuation + Investment amount = Post-money valuation.

Can the Shareholders’ Agreement (SHA) include terms that differ from the term sheet?

Yes, parties can mutually agree to modify terms post-term sheet execution in the SHA.

What terms are generally included in a term sheet?

Terms include investor and promoter details, investment amount, securities to be issued, management rights, transfer restrictions, shareholder rights, and exit mechanisms.

Is signing a term sheet mandatory before investment?

No, signing a term sheet is not mandatory but recommended to ensure both parties are aligned on key investment terms.

Is a term sheet legally binding?

Typically, a term sheet is non-binding except for specific clauses like validity, exclusivity, confidentiality, and governing law. It is advisable to clearly state these exceptions to avoid misunderstandings.