raising funds by startups in india

Raising Funds by Startups inIndia

www.equicorplegal.com

Basic Question which everyStartup face…….

It takes more than just a great idea to run a successful business. Entrepreneurs and existingbusiness owners need capital to pursue their vision. There are few basic questions whichevery startups face…..

Legal Aspects for Starting Up: What are the basic forms of doing business and theirrelative benefits? Essential procedures and prerequisites of each form of business.

Contractual safeguards: How do we limit contractual liability? Relevant stakeholders(promoters/co-founders; employees; consultants; clients and vendors) and the respectivecontract liability mitigating strategies.

Employees and workplace regulations: When are we subject to employee benefits? Withincreasing international focus on workplace regulations, employees have many legal rightsthat must not be neglected. Basic criteria for applicability of such regulations and theirimplications shall be discussed.

Data Protection: How do we protect the competitive value of data in our business? Dataprotection is distinct from IPRs, and therefore, we must understand the legal framework ofprotecting data and the relevant international trends in this regard.

It takes more than just a great idea to run a successful business. Entrepreneurs and existingbusiness owners need capital to pursue their vision. There are few basic questions whichevery startups face…..

Legal Aspects for Starting Up: What are the basic forms of doing business and theirrelative benefits? Essential procedures and prerequisites of each form of business.

Contractual safeguards: How do we limit contractual liability? Relevant stakeholders(promoters/co-founders; employees; consultants; clients and vendors) and the respectivecontract liability mitigating strategies.

Employees and workplace regulations: When are we subject to employee benefits? Withincreasing international focus on workplace regulations, employees have many legal rightsthat must not be neglected. Basic criteria for applicability of such regulations and theirimplications shall be discussed.

Data Protection: How do we protect the competitive value of data in our business? Dataprotection is distinct from IPRs, and therefore, we must understand the legal framework ofprotecting data and the relevant international trends in this regard.


Most Fundamental Questionwhich every Startup face…….

…..However, the most fundamental and important

question is – “How to fund your startup?”

If you don't have the cash in your wallet, whatdo you do?

However, the most fundamental and importantquestion is – “How to fund your startup?”

If you don't have the cash in your wallet, whatdo you do?


Understanding the Options

It is important to explore and understand the full range of optionsavailable to an entrepreneur. Luckily, there are still options for fundingnew companies, but finding and securing the cash will take carefulresearch, good negotiating skills, and, above all, dedicated commitment tolaunch your business. Few options for raising funds by startups areprovided below:

1. Family & Friends

2. Crowd Funding

3. Preferred Stock & Convertible Debt

4. Angel Investment

5. Venture Capital

It is important to explore and understand the full range of optionsavailable to an entrepreneur. Luckily, there are still options for fundingnew companies, but finding and securing the cash will take carefulresearch, good negotiating skills, and, above all, dedicated commitment tolaunch your business. Few options for raising funds by startups areprovided below:

1. Family & Friends

2. Crowd Funding

3. Preferred Stock & Convertible Debt

4. Angel Investment

5. Venture Capital


Family & Friends

People like to invest not only in the idea but in the personinvolved in it. However using family and friends as a sourceof raising money can be risky. It can create a strain that canruin personal relationships. It is also worth to note that over70% of startups fail in their first three years often because offactors completely outside of the control of the owners.Make sure that you are borrowing money that they canafford to lose. Execute a written agreement with all terms,even if it is a “friendly” loan.

People like to invest not only in the idea but in the personinvolved in it. However using family and friends as a sourceof raising money can be risky. It can create a strain that canruin personal relationships. It is also worth to note that over70% of startups fail in their first three years often because offactors completely outside of the control of the owners.Make sure that you are borrowing money that they canafford to lose. Execute a written agreement with all terms,even if it is a “friendly” loan.


Crowd Funding

Crowd funding takes it name from the factthat your project is funded by the publicusing their own personal funds. To start with,you propose the idea that you wish to seefunded. People can then choose how much orhow little they want to give you.

Crowd funding takes it name from the factthat your project is funded by the publicusing their own personal funds. To start with,you propose the idea that you wish to seefunded. People can then choose how much orhow little they want to give you.


Preferred Stock/ConvertibleDebt

Startups generally offer preferred shares orconvertible debentures when they raise money.Common stock is typically given to founders andreserved for options. The reason to offer preferredshares or convertible debentures is that they oftencome with provisions like rights and dividendpreference. They are also superior to the commonstock. This will make the investment moreattractive and assure the investor he or she will bepaid out first.

Startups generally offer preferred shares orconvertible debentures when they raise money.Common stock is typically given to founders andreserved for options. The reason to offer preferredshares or convertible debentures is that they oftencome with provisions like rights and dividendpreference. They are also superior to the commonstock. This will make the investment moreattractive and assure the investor he or she will bepaid out first.


Angel Investment

Angel Investment can go beyond the purelyfinancial. The advice and connections that agood angel investor can offer can be equallyas valuable. Angel investors are willing totake on the risk of a brand new startup.

Angel Investment can go beyond the purelyfinancial. The advice and connections that agood angel investor can offer can be equallyas valuable. Angel investors are willing totake on the risk of a brand new startup.


Venture Capital

Venture capitalists aim to invest in earlystage businesses with high growth potential.Traditionally venture capitalists receivedequity in the business in exchange forfunding it. However these days they typicallydemand a mixture of equity and debtfinancing

Venture capitalists aim to invest in earlystage businesses with high growth potential.Traditionally venture capitalists receivedequity in the business in exchange forfunding it. However these days they typicallydemand a mixture of equity and debtfinancing


Source of Funding/ Raisingcapital

Both long term funds and working capital – is one of thebiggest issues and challenges for any startup lookingtowards scale, sustainability and success. Depending onthe business model and regulatory considerations, choiceof entity will play a key role in determining the optionsof capital available (i.e. grant capital vs. commercialcapital), source of capital available (i.e. domestic capitalvs. foreign capital) and manner of engagement with thefunders – therefore, choice of legal entity should also bemade through the lenses of the proposed sources ofcapital.

Both long term funds and working capital – is one of thebiggest issues and challenges for any startup lookingtowards scale, sustainability and success. Depending onthe business model and regulatory considerations, choiceof entity will play a key role in determining the optionsof capital available (i.e. grant capital vs. commercialcapital), source of capital available (i.e. domestic capitalvs. foreign capital) and manner of engagement with thefunders – therefore, choice of legal entity should also bemade through the lenses of the proposed sources ofcapital.


Consult the Experts

There can be different other structuresfor raising funds by startup, however, astartup should look into the optionswhich is best suited for your business.

To know the further details aboutRaising Funds by Startups and otheraspects of startups, contact us [email protected]

There can be different other structuresfor raising funds by startup, however, astartup should look into the optionswhich is best suited for your business.

To know the further details aboutRaising Funds by Startups and otheraspects of startups, contact us [email protected]


About Us Equi Corp Associates (ECA) is a mission driven, start-up law practice based in New

Delhi, India and founded in 2012 for providing affordable access to legal counselbenefitting start-ups, small and growing businesses, social business enterprises, impactinvestors and non-profit organizations. Our boutique service offerings are primarily at theintersection of start-up, sustainable development, social enterprise and investmentsectors, designed to help clients wade through laws that were not originally designedwith them in mind.

The basic idea behind starting ECA was to be a part of India’s growth by reaching out tonovel start-ups and established businesses, and helps them adapt best globalpractices/technologies in local conditions and in advising them about legal aspectsinvolved in modern markets in order to keep our clients in pace with the dynamiccompetitive environment.

ECA is instrumental in advising various social enterprises and start ups in setting uptheir business in India.

ECA not only having some of the best legal minds, but the best business minds too:lawyers are intimately familiar with the business environment, and know the emergingrisks and opportunities of their industries and practice groups.

Equi Corp Associates (ECA) is a mission driven, start-up law practice based in NewDelhi, India and founded in 2012 for providing affordable access to legal counselbenefitting start-ups, small and growing businesses, social business enterprises, impactinvestors and non-profit organizations. Our boutique service offerings are primarily at theintersection of start-up, sustainable development, social enterprise and investmentsectors, designed to help clients wade through laws that were not originally designedwith them in mind.

The basic idea behind starting ECA was to be a part of India’s growth by reaching out tonovel start-ups and established businesses, and helps them adapt best globalpractices/technologies in local conditions and in advising them about legal aspectsinvolved in modern markets in order to keep our clients in pace with the dynamiccompetitive environment.

ECA is instrumental in advising various social enterprises and start ups in setting uptheir business in India.

ECA not only having some of the best legal minds, but the best business minds too:lawyers are intimately familiar with the business environment, and know the emergingrisks and opportunities of their industries and practice groups.


ECA’s Network Presence

Delhi/NCR

Dehradun

Jaipur Allahabad Guwahati

Mumbai

Bangalore

Our AssociatedOffice

Kolkata

Hyderabad

Chennai

ECA


WHY Equi Corp Associates??

• ECA is a multispecialty law firm, with its founding partners having a vastexperience for providing legal services to a variety of domestic & internationalclients, corporations, financial entities & government agencies.

• Our respected clients - from individuals to small businesses to Fortune 500companies -- turn to us for trusted legal counsel.

• ECA is equipped with required professional setup of Qualified, Experienced andKnowledgeable members.

• We advise and assist NRI’s/PIO’s, Foreign Investors and Indian entrepreneurswith legal services that enables them to compete with best in world in themodern economy characterised by technology based, venture capital funded,futuristic businesses governed by complex and ever evolving legal andstatutory framework.

• ECA is also effective in providing match making partner/locating strategicalliance, follow up and representation with Government of India or any otherincidental work related to investment or legal guidance in India.

• ECA is a multispecialty law firm, with its founding partners having a vastexperience for providing legal services to a variety of domestic & internationalclients, corporations, financial entities & government agencies.

• Our respected clients - from individuals to small businesses to Fortune 500companies -- turn to us for trusted legal counsel.

• ECA is equipped with required professional setup of Qualified, Experienced andKnowledgeable members.

• We advise and assist NRI’s/PIO’s, Foreign Investors and Indian entrepreneurswith legal services that enables them to compete with best in world in themodern economy characterised by technology based, venture capital funded,futuristic businesses governed by complex and ever evolving legal andstatutory framework.

• ECA is also effective in providing match making partner/locating strategicalliance, follow up and representation with Government of India or any otherincidental work related to investment or legal guidance in India.


The Verticals

• Corporate & Commercial

• Banking & Finance

• Real Estate

• Infrastructure & Project Finance

• Employment & Labour

• Media, Sports & Entertainment

• Litigation & Arbitration

• Tax & Consulting

• Intellectual Property

• Corporate & Commercial

• Banking & Finance

• Real Estate

• Infrastructure & Project Finance

• Employment & Labour

• Media, Sports & Entertainment

• Litigation & Arbitration

• Tax & Consulting

• Intellectual Property

The Firm specializes in verticals suchas IT, ITES, Bio-tech, Power, Water,Retail Trade, Education, Mining,Aviation, Tourism, Insurance,Telecom, Media & Entertainment


Corporate & Commercial Services

Foreign Investment in India / Abroad

Drafting and vetting of Joint Venture Agreements, CorporateAgreements, Management Agreement, Cross border transactionagreements etc.,

Compliance Audit, Due Diligence & Transaction Advisory;

Formation & structuring of business entities;

Mergers & Acquisitions & Private Equity;

Competition & Fair Trade Practice;

Corporate Governance & Restructure;

Venture Fund, Mutual Fund, RE Trust Funds.

Foreign Investment in India / Abroad

Drafting and vetting of Joint Venture Agreements, CorporateAgreements, Management Agreement, Cross border transactionagreements etc.,

Compliance Audit, Due Diligence & Transaction Advisory;

Formation & structuring of business entities;

Mergers & Acquisitions & Private Equity;

Competition & Fair Trade Practice;

Corporate Governance & Restructure;

Venture Fund, Mutual Fund, RE Trust Funds.


Banking & Finance Services

Credit Co-operative & Financial Institutions; Quasi Banks & Nidhi Companies; Urban Credit Co-operative Banks; Micro Finance Institutions; Banks & NBFCs and other Financial Intermediaries; Alternative Investment Funds; Real Estate Finance including Collective investment

Schemes; Structured & Asset Finance; National Pension Scheme Securitization; Debt recovery

Credit Co-operative & Financial Institutions; Quasi Banks & Nidhi Companies; Urban Credit Co-operative Banks; Micro Finance Institutions; Banks & NBFCs and other Financial Intermediaries; Alternative Investment Funds; Real Estate Finance including Collective investment

Schemes; Structured & Asset Finance; National Pension Scheme Securitization; Debt recovery


Real Estate Services

Title Search & Property transactions Joint ventures in Real Estate Build to suit campuses Development of Technology Parks,

Integrated Townships, Warehouse &Logistics Parks, SEZ, Hotels,Multiplexes Entertainment Centres,Slum Developments, RehabilitationProjects etc.

Sale deeds Lease, Leave and License Agreements Gift deeds Mortgage & Finance Agreements

Title Search & Property transactions Joint ventures in Real Estate Build to suit campuses Development of Technology Parks,

Integrated Townships, Warehouse &Logistics Parks, SEZ, Hotels,Multiplexes Entertainment Centres,Slum Developments, RehabilitationProjects etc.

Sale deeds Lease, Leave and License Agreements Gift deeds Mortgage & Finance Agreements


Infrastructure & Project Finance Services

Transaction Advisory: Energy, Oil and Gas, Highway, Road,Airport, Ports, Water & Sanitation and Telecommunications

Drafting, negotiations and review of financing & securitydocuments

Tender Documents, Bidding process, PPP, ConcessionContracts, PPA, EPC Contracts

Government Approvals & Liaisoning with statutoryauthorities

Structuring, negotiation & documentations of projects

Transaction Advisory: Energy, Oil and Gas, Highway, Road,Airport, Ports, Water & Sanitation and Telecommunications

Drafting, negotiations and review of financing & securitydocuments

Tender Documents, Bidding process, PPP, ConcessionContracts, PPA, EPC Contracts

Government Approvals & Liaisoning with statutoryauthorities

Structuring, negotiation & documentations of projects


Employment & Labour Services

Appointment/Offer letters, Termination practices

Employee Stock Option Plan

Employee Handbook

Labour Compliance

Service Bonds

Standing Orders & Service Rules

Migration & Emigration of Employees

Country specific employment relation

Grievance Settlement Procedures

Appointment/Offer letters, Termination practices

Employee Stock Option Plan

Employee Handbook

Labour Compliance

Service Bonds

Standing Orders & Service Rules

Migration & Emigration of Employees

Country specific employment relation

Grievance Settlement Procedures


Media, Sports & Entertainment Services

Television & News Channel; Media & Production Houses; Endorsements, Distribution, Event Sponsorship,

Venue, Marketing Rights, Merchandise Agreements; FM Radio Channels; Publishing House; Studios; Sports Club

Television & News Channel; Media & Production Houses; Endorsements, Distribution, Event Sponsorship,

Venue, Marketing Rights, Merchandise Agreements; FM Radio Channels; Publishing House; Studios; Sports Club


Litigation & Arbitration Services

Commercial Litigation

Recovery/Enforcement

Civil Litigation

Medical Negligence

IP Litigation

Arbitration

White Collar Crimes

Economic Offences

Bankruptcy/Insolvency

Criminal Litigation

Commercial Litigation

Recovery/Enforcement

Civil Litigation

Medical Negligence

IP Litigation

Arbitration

White Collar Crimes

Economic Offences

Bankruptcy/Insolvency

Criminal Litigationwww.equicorplegal.com

Tax & Consulting Services

Company Secretarial Services:- Incorporation of companies/branches/liaison

office/representative office- Maintenance of Secretarial Record and recurring

secretarial services- Registration with Statutory Authorities including

Income Tax,RBI,EoU, STPI, Custom Bonding, Central Excise etc.

Accounting & Payroll Services Tax and Regulatory Services Advising on Customs & Excise matters Immigration Services

Company Secretarial Services:- Incorporation of companies/branches/liaison

office/representative office- Maintenance of Secretarial Record and recurring

secretarial services- Registration with Statutory Authorities including

Income Tax,RBI,EoU, STPI, Custom Bonding, Central Excise etc.

Accounting & Payroll Services Tax and Regulatory Services Advising on Customs & Excise matters Immigration Services


Intellectual Property Services

IP Portfolio Management IP Auditing IP Strategic Alliances

Collaboration Licensing Technology Transfer Agreements

Search, drafting, filing and prosecution in : Patents Trademarks Copyrights Industrial Designs

IP Portfolio Management IP Auditing IP Strategic Alliances

Collaboration Licensing Technology Transfer Agreements

Search, drafting, filing and prosecution in : Patents Trademarks Copyrights Industrial Designs


Our CommitmentValue

One stop legal boutique where assignments carried out at a fraction ofthe cost of clients staff

Reduce client staff management time and overhead costs, and increaseclients profitability

Enable clients staff to concentrate on more interesting and value-addedwork

Service Robust management and procedures to ensure delivery on time and on

budget Dedicated one-to-one communication with client, to ensure every

project is right first time Full service delivery is achieved by synergies of subject matter

expertise of our in-house Lawyers, Chartered Accountants, CompanySecretaries and Tax Consultants

Quality Two-level file review and signoff by expert Lawyers, even for the

smallest assignment

Value One stop legal boutique where assignments carried out at a fraction of

the cost of clients staff Reduce client staff management time and overhead costs, and increase

clients profitability Enable clients staff to concentrate on more interesting and value-added

workService

Robust management and procedures to ensure delivery on time and onbudget

Dedicated one-to-one communication with client, to ensure everyproject is right first time

Full service delivery is achieved by synergies of subject matterexpertise of our in-house Lawyers, Chartered Accountants, CompanySecretaries and Tax Consultants

Quality Two-level file review and signoff by expert Lawyers, even for the

smallest assignmentwww.equicorplegal.com

Our Core Strengths

Dedicated team of legal professionals with strong deal exposure andknowledge of regulations of various sectors.

Proactive and structured approach

Well defined processes

Well defined Project methodology tailored to suit the needs of clients forservice delivery

Talented team with experience of working with some of the largestcompanies in India exposure to leading cross border transactions in India

Experience & proven capabilities to handle Diversified Multi-national Clientsi.e. Information Technology, Energy, Manufacturing, Consultancy, Oil & GasSector, Retail Trading, Hospitality, Restaurant and related sectors.

Competitive advantage of costing by virtue of expertise and experiencedresources.

Dedicated team of legal professionals with strong deal exposure andknowledge of regulations of various sectors.

Proactive and structured approach

Well defined processes

Well defined Project methodology tailored to suit the needs of clients forservice delivery

Talented team with experience of working with some of the largestcompanies in India exposure to leading cross border transactions in India

Experience & proven capabilities to handle Diversified Multi-national Clientsi.e. Information Technology, Energy, Manufacturing, Consultancy, Oil & GasSector, Retail Trading, Hospitality, Restaurant and related sectors.

Competitive advantage of costing by virtue of expertise and experiencedresources.


For further informationContact :

Aashish SrivastavaPartner

Equi Corp AssociatesAdvocates & Solicitors

W-86, Classic House, GK-II, New DelhiT: +91 11 40573261

Mobile : +919958709189E-mail :[email protected]


raising funds by startups in india

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