I often get asked will consumer technology companies take over the enterprise world. The argument usually is very simple and goes like this — the consumer tech giants have more cash, can attract the best engineers, know how to build great products and were built in...
Building a world-class startup is hard! As a founder, you are building so many things together — from a team and a business model, to a product and a marketing strategy– there is never enough bandwidth or skills to do everything that your business demands!...
As an investor, I am often asked this question, and the simple answer is, if I believed this were true, I wouldn’t be in the business. But let me explain. The Indian tech economy is often compared with China’s, with similar opportunities and challenges. There is...
Perhaps the top question venture capitalists have asked Indian tech companies in the last 2 years is about their profitability potential. In view of the discount-driven growth strategy of some leading internet companies, it is certainly a question worth asking. While...
The Company and the Founders shall complete an initial public offering or a ‘strategic sale’ within 5 years from the Closing Date (“Exit Date”) on terms that are acceptable to the Investor. The failure of Company and Founders to provide an exit by the Exit Date shall not relieve the Company / Founders of their obligations to provide an exit to the Investor, which shall continue until the Investor ceases to hold any shares. In case of failure to provide exit, the Investor shall inter-alia have a drag along right on all other shareholders of the Company.
Liquidation Preference
Higher of 1x or pro rata entitlement on an as-if converted basis in any liquidity event. Liquidity event shall be defined in the definitive documents and will inter alia include change in control or sale of substantially all of the assets of the Company.
Pre-Emptive Rights
The Investor shall, in any subsequent offering of securities by the Company, have a right to maintain their shareholding in the Company. [Note to Draft: Any super pro rata rights will be over and above this and should be included here]
Valuation
The valuation section concerns what an investor believes the company is worth. valuation issues addressed in the term sheet will include: pre-money valuation, post-money valuation, capitalization table and price per share.
