Start-ups need external funding or capital to hire bettertalent, have a robust R&D wing, and expand to different locations/segments. Startups can raise funding from different sources such as angel investors, venture capital firms, banks, accelerators, etc. The entire process of raising funds is extremely tedious and complicated. We have a dedicated team that caters to the founders and investors throughout their journey from enteringthe business to multi-fold growth. Our lawyers regularly assist the startups in fund formation, due diligence, drafting and negotiation of transaction documents, and executing the deal. Further, we bring in-depth expertise to advise other transactions such as mergers, acquisitions, share-swaps, buybacks, etc. We also understand the entire process of transactions might be complicated for clients. Hence, the team also assists in all the regulatory filings/applications required for a transaction.
There can be multiple benefits of mergers and acquisitions. However, it is frequently related to being more efficient or expanding capacities. Othercommon advantages include increased distribution possibilities, since a merger or acquisition frequently broadens a company's geographic reach, network, or service region. Furthermore, decreasing staff redundancy can assist in lowering labour expenditure. A corporation can profit from enhanced labourtalent by extendingthe labour pool from which it can draw.
For a merger or acquisition, there are several essential services that should be a part of the overall process. Some of them are: a) Financial, Tax, Technology & Legal Due Diligence b) Transaction Valuation, c) Joint Venture/Share Purchase &Subscription Agreement d) Business Restructuring e) Private Equity, Debt & Equity Syndication.
Before seeking funds from any external source, a start-up shall have the following documents that all early-stage investors require: a) Certificate of Incorporation: A Certificate of Incorporation (C01) is a legal document used to incorporate a private corporation under existing laws. b) Term Sheet: A term sheet is a non-binding agreement that outlines the features, terms, and conditions of a financial investment. c) Share Subscription and Shareholders' Agreement: These documents clearly lay down the rights of the Investors as perthe shares issued to them. d) Valuation report: When looking for startup capital, a valuation report is a legal necessity. A registered valuer's valuation is needed bythe Companies Act of 2013, and a merchant banking valuation is required by the Income Tax Act of 1961.
There are numerous sources in which a startup can raise funds, apartfrom personal sources (friends or family) and bootstrapping. The common external sources are angel investors, accelerators, incubators, venture capital firms, government schemes, and bank loans.