Tag - Startup

eLagaan Whiteboard Friday

Founders vesting: All you need to know [Whiteboard Friday]

Though Founders hold a substantial stake in the company during incorporation, they need to go through a vesting schedule to protect their interest in the company. This schedule can start from incorporation or subsequent funding rounds depending on investor negotiations.  The current episode of...

eLagaan Whiteboard Friday

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 they may ask for few years of lock-in for founders. This is critical from a strategic and company’s perspective...

eLagaan Whiteboard Friday

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 now and released when the underlying factor is complete (time/ milestone). The current episode of eLagaan Whiteboard...

eLagaan Whiteboard Friday

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 company. The current episode of eLagaan Whiteboard Friday talks about what factors or variables can...

eLagaan Whiteboard Friday

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 for founder’s share holding. This document is a must for due diligence when you...

eLagaan Whiteboard Friday

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 free to existing investors whenever this gets triggered. The current episode of eLagaan Whiteboard Friday talks...