Founders Lock-in [Whiteboard Friday]

When you raise money, the investors want the founders to stay back and run the show. Although you may have agreed for a reverse vesting schedule, but while onboarding investors…

Investment tranches [Whiteboard Friday]

When you raise money, many times the investment may come in tranches instead of single shot. The tranches could be linked to time, milestones or both. The tranches are committed…

Liquidation preferences [Whiteboard Friday]

While raising investment, you will liquidation preferences clause in your SHA. This clause impacts how investors are paid in events of M&A (mergers & acquisition) or during liquidity of the…

Founder’s agreement [Whiteboard Friday]

For founders who are not related to each other (like husband-wife, father-son etc.) it is important to enter into Founders Agreement covering important working relationship between founders and vesting schedules…

Anti Dilution Rights [Whiteboard Friday]

When investors come onboard, they ask for anti dilution rights to protect themselves from any down trend in valuation of the startup in future. Startup should issue additional shares for…

Investor reporting & MIS [Whiteboard Friday]

As investors comes on board post investment, they need regular updates on various aspects of startup followed by review meetings. Sharing accurate MIS on agreed timelines is very important. The…

Mastering term sheet [Whiteboard Friday]

Term sheet is the most important strategic document that a startup gets while raising money. It is more critical than the share holding agreement or share subscription agreement (SHA or…

What is a CAP table? [Whiteboard Friday]

The current capital structure of the startup is called a cap table. It contains details of various stakeholders and their holdings alongwith the type of instrument they hold.It gives a…