There's a high chance if you are running a company you would raise funds.

Now a lot of people have a surface-level knowledge of the investment rounds.

And you might be in the same place.

But having surface-level knowledge does not really help.

Because even when you go to hire a 3rd party to help you with the whole investment process...

You wouldn't even know what to look out for.

And before an investor even invests in your company, there are a couple of steps that are taken.

First of all - you need to have an agreement that deals with all aspects of share issuance to the investor.

Second thing is - you have to make sure the investor can't obstruct the operations of the company and majority of the management rights are still with you.

Third Most Important Part - if the investor wants to help your company grow, then there needs to be a condition for this.

Now raising seed rounds is not easy.

And a lot of you guys will get overwhelmed if it's your first time doing it.

I know this because we recently helped a client raise funds.

He already had an investor, but he didn't know about the issues I mentioned earlier.

Now in order to make sure everything was done as smoothly as possible, here are the steps I took with my team.

Drafting The Required Agreement

The first step was to draft a Share Subscription Cum Shareholders Agreement.

After a few meetings and discussions, we understood the transaction, the needs of our client, and what had been orally agreed upon.

And based on the discussion, we drafted the document covering everything.

From the current shareholding pattern, investment amount, key obligations, reps, and warranties. Everything.

Protecting The Rights Of The Client

While the Investor did ask for a board seat, we reserved the right of the client to appoint a majority of the members of the board.

The investor however wanted to have a say in certain super important matters such as the sale of the Company - these were added to the “Reserved List” requiring all party's consent..

Both parties wanted each other to stick for some time and contribute to the company - hence, lock-ins were added too.

Miscellaneous Things

The Investor wanted an exit option too.

They wanted our client's company to provide them with an exit in certain years with 1x liquidation preference.

So we took care of that.

And some of the miscellaneous terms we covered were Pre-emptive rights, information rights, Stock Options, and Non-competes were added too - for the smooth running of the company.

Let me know if you want me to create a post that covers why those things are needed.

Now, at the end of our discussion, draft of the agreement, and help of our client, he was left with:

1) An agreement that covered all the terms he originally needed

2) Rights to still manage and operate the company the way he wanted

3) Investor's confidence to actually invest in his business

That's all that was required in the end.

Raising funds is not an easy thing.

Don't let anyone tell you otherwise.

It takes a lot of patience, a lot of focus, and help to make sure everything is done right.

There's also the due diligence part where the Investor will find some things wrong in your company - like agreements, policies, and the way the business is structured.

And everything will need to be fixed before the investor proceeds forward.

Now luckily for you, I do all this for INDIAN BUSINESSES.

So if you already have an investor, and already have the basic terms agreed upon, pick a slot here:

>> > PICK A TIME < < <

We will go over the steps, so you won't have to worry about anything.

Just sit back and relax.

-- Akhil Mishra