Fundraising Compliances
You also need to show to investors that everything is transparent and sorted at the fundamental level in your organisation.
Securing good funding for your startup is like securing a scholarship, that is, now you don’t have to worry about the finances and you can simply monomaniacally focus on the main task in which you are supposed to excel. But unlike scholarship, hard work and being meritorious won’t suffice to land investment worth crores. You also need to show to investors that everything is transparent and sorted at the fundamental level in your organisation.
Sources of External Funding in India
Though there are many sources for organisations to raise funds from like angel investors, venture debt funds, venture capitalists, crowdfunding, IPOs, financial institutions, but the source of funds must align with operations of your organisation. There are different sources to raise capital depending upon which stage your business is. Ex: You will not raise money from crowdfunding if you are an incumbent company with INR 5 crore turnover.
Time Taken to Fundraise
Fundraising from external sources is a cumbersome process and can easily take 6 to 8 months if everything goes well.
Fundraising Compliances and Documentation
- Revamping organisational structure;
- Equity structuring;
- Share capitalisation table
- Due Diligence: Preparing reports pertaining to the financial, corporate, and contractual status of your organisation for presenting to investors. Furnishing documents around assets and Intellectual property;
- Term sheet: Type of securities, investment criteria, management rights, etc;
- Investment or Shareholders’ agreement;
- Preparation of vesting provisions;
- Subscription agreement;
- Articles of Association;
USAIndiaCFO Advantage
In our experience, many startup organisations fail to raise funds because they couldn’t convince the investors about the business capabilities of the organisation and having robust legal and financial comprise a substantial part of it. USAIndiaCFO has been serving start-ups which raise investments more frequently. On top of that, we also assist businesses with managing their CAP table, the optimal path for equity issues, tax-effective offloading of the stake, etc.
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