{"id":34998,"date":"2021-08-28T12:11:25","date_gmt":"2021-08-28T06:41:25","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=34998"},"modified":"2021-08-29T17:29:48","modified_gmt":"2021-08-29T11:59:48","slug":"fundraising-for-startups-in-india","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/fundraising-for-startups-in-india\/","title":{"rendered":"Fundraising for Startups in India: Key Documentations"},"content":{"rendered":"\n<p class=\"has-drop-cap\">In this Startups Landscape, breakthrough business ideas improve value addition to the society. But transforming a bright business idea into a money munching machine seeks immense hardship, professionalism, and funding. Unfortunately, not all bright ideas have the backup of required financial cushion. This is where fundraising for startups come into play. This write-up aims to flash some light on technicality of the fundraising process, mainly the documentation part that will ease out your fundraising journey. The article enlists fundamental documentation related to the fundraising for startups in India. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Prominence of Documentation in Fundraising for Startups \u00a0<\/h2>\n\n\n\n<p>In general, Institutions like <em><strong>Venture Capital<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Venture_capital\"><em><strong>[1]<\/strong><\/em><\/a><\/sup>, Private Equity, Angel Investors, &amp; Investment bankers predominately favour those ideas that have potency to garner great ROI in future. So it would take more than a casual effort for the start-ups to convince these investors and crack the deal. <\/p>\n\n\n\n<p><strong><em>So does that mean the chances of getting an idea\napproved is remarkably difficult?<\/em><\/strong><\/p>\n\n\n\n<p>Well, the answer is No; provided you have a right blueprint to follow that entail on-par documentation and other tangible details that we have discussed in following section. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important\"><a href=\"https:\/\/corpbiz.io\/learning\/process-of-startup-india-registration-online\/\">Process of Startup India Registration: A Step by Step Guide <\/a><\/mark><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Documents regarding fundraising for startups in India <\/h3>\n\n\n\n<p>We have divided the documents relating to\nfundraising for startups into pre-funding &amp; post-funding.&nbsp;It is vital\nto undertake this activity cautiously for the steady growth of the startups,\nwith the norms adhered to at regular intervals.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Pitch deck&nbsp;<\/h3>\n\n\n\n<p>A Pitch deck refers to an official presentation which the startups mainly use to convince prospective investors during the fundraising process. It can be a simple power point presentation that manifests the following attributes of the business. In laymen terms, a pitch deck is a way to project your idea to any no. of the audience, mainly investors. One of the most critical facets of an effective pitch deck is to sync it based on the audience &amp; forum to which it is supposed to be presented. Several prime components to a pitch deck include elaborative summary slides, the issue you are encountering, the product, the strategy\/market, the employees, financials\/projections &amp; the tone you wish to convey.&nbsp;<\/p>\n\n\n\n<div class=\"shadow1\">A pitch deck refers to the accumulation of slides that serves as the backdrop for your presentation. It acts as a visual guide &amp; reference to the valuable points you wish to make to prospective investors, &amp; it can be the difference between a mediocre pitch &amp; one that ensures the funding. <\/div>\n\n\n\n<p><strong><em>Here&#8217;s what the Pitch deck ideally comprises in general&nbsp;<\/em><\/strong><\/p>\n\n\n\n<ul><li>Nature of product and services<\/li><li>Survey on supply chain (demand\nand supply)<\/li><li>Revenue generation model<\/li><li>Project costing report<\/li><li>Cashflow projections<\/li><li>Unique Selling Proposition<\/li><li>Industry-related data<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Non-disclosure agreement (NDA)<\/h3>\n\n\n\n<p>NDA acts as a protective measure for\nstart-ups in the fundraising campaign as it is only thing that keeps their\ntrade secret, aspiring idea, IPs alive and safe. Hence, it plays pivotal roles\nin the process of fundraising for startups. <\/p>\n\n\n\n<p><a href=\"https:\/\/corpbiz.io\/startup-india-registration\"><strong>Startups in India<\/strong><\/a> often presume that consumer data, formulas, processes, &amp; techniques are not imperative for making or breaking the venture. But, most successful businesses have a different thought on that as they strongly believed these factors are critical for startups growth.&nbsp;<\/p>\n\n\n\n<p>Thus, it is imperative that employees,\ninvestors and consultants with whom valuable data would be shared have to be\ncovered by a pr\u00e9cised Non-Disclosure Agreement.<\/p>\n\n\n\n<p>Do not forget to enclose your signature in\nNDA before sharing details with investors.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Due-Diligence report&nbsp;<\/h3>\n\n\n\n<p><a href=\"https:\/\/corpbiz.io\/due-diligence\"><strong>Due diligence<\/strong><\/a> refers to the process of research and analysis that take place before the initiation of any venture, investment, acquisition, so on and so forth. The company usually leverages due diligence to identify to pain points &amp; value of the subject of the due diligence. These findings are then aptly summarized in a report, commonly known as a due diligence report.<\/p>\n\n\n\n<p><strong><em>The process of due diligence take place in order\nto;&nbsp;<\/em><\/strong><\/p>\n\n\n\n<ul><li>Analyze multifarious aspects to\navail better clarity on entities&#8217; commercial potential<\/li><li>Determine the financial\nviability of the proposed venture at a comprehensive level<\/li><li>Examine the prevalent legal\nnorms and regulatory framework linked with the proposed ventures or business\ndealing.&nbsp;<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">Areas of Focus in a Due Diligence Report<\/h4>\n\n\n\n<p><strong>Viability:<\/strong> Accessing the feasibility of the target entity can be done via an\nextensive study of the business &amp; financial plan.&nbsp;&nbsp;<\/p>\n\n\n\n<p><strong>Monetary\nfacet:<\/strong> Critical fiscal data &amp; a ratio analysis\nwould be imperative to comprehend the complete picture.<\/p>\n\n\n\n<p><strong>Personnel:<\/strong> A critical parameter to consider is the potential &amp; credibility\nof the individual working in the company.<\/p>\n\n\n\n<p><strong>Environment:<\/strong> No business functions in isolation. Therefore, it is imperative to\ndig down into the macro-environment &amp; its overall impact on the target\nentity.<\/p>\n\n\n\n<p><strong>Technology:<\/strong> A very significant factor to consider is technology&#8217;s assessment\navailable with the entity. Such an assessment is imperative as it aids pinpoint\nfuture actions.<\/p>\n\n\n\n<p><strong>Prevailing\n&amp; Key Liabilities:<\/strong> Any type of pending\nlitigations &amp; regulatory problems ought to be taken into account.<\/p>\n\n\n\n<p><strong>Effect\nof synergy:<\/strong> The establishment of coordination\nbetween the target entity and the prevailing company serves as a medium for\ndecision making.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Term sheet<\/h3>\n\n\n\n<p>A term sheet refers to a non-binding agreement\nthat manifests the fundamental terms and norms of an investment. The term sheet\nacts as an intuitive template &amp; basis for more information, legally binding\ndocuments. Once the parties are engaged, reach an agreement on the information\ncited in the term sheet, a binding agreement that conforms to the sheet detail\ndrawn up. Ideally, a term sheet encompasses the given aspects<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/08\/Term-sheet.png\" alt=\"Term sheet\" class=\"wp-image-35010\" width=\"565\" height=\"301\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/08\/Term-sheet.png 842w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/08\/Term-sheet-300x160.png 300w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/08\/Term-sheet-768x410.png 768w\" sizes=\"(max-width: 565px) 100vw, 565px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Shareholder agreement<\/h3>\n\n\n\n<p>A shareholders&#8217; agreement, broadly known as\na stockholders&#8217; agreement, refers to a legal contract that briefs out how an\nentity ought to perform its functions and drafts shareholders&#8217; duties &amp;\nrights. The agreement also entails detail pertaining to the company &amp; the\nprotection of shareholders. Such agreements aim to ensure that shareholders are\ntreated impartially &amp; their rights are respected. Further, it also enables\nshareholders to make decisions regarding the selection of future shareholders\nand facilitates protections for minority positions.&nbsp;&nbsp;<\/p>\n\n\n\n<p><strong>Point\nto be noted: Make sure the documentations mentioned should <\/strong>revolve around the following traits: <\/p>\n\n\n\n<ul><li>Coherent <\/li><li>Compelling <\/li><li>Clarity <\/li><li>Conciseness <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p>Positioning yourself as a genuine contender for funding requires a tremendous amount of professionalism and a pre-planned approach. The documents mentioned above are nothing but essential prerequisites to kick start your funding journey. It is needless to mention that these documents should be created with due consideration, preferable under the guidance of field experts. Keep in the subtle preparation of document is the key to the success in the journey of Fundraising for Startups. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important\"><a href=\"https:\/\/corpbiz.io\/learning\/benefits-of-startup-india-registration-in-india\/\">Benefits of Startup India Registration in India <\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In this Startups Landscape, breakthrough business ideas improve value addition to the society. But transforming a bright business idea into a money munching machine seeks immense hardship, professionalism, and funding. Unfortunately, not all bright ideas have the backup of required financial cushion. This is where fundraising for startups come into play. This write-up aims to [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":35009,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[968],"tags":[1938],"acf":{"service_id":"250"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":5964,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/34998"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=34998"}],"version-history":[{"count":36,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/34998\/revisions"}],"predecessor-version":[{"id":35043,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/34998\/revisions\/35043"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/35009"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=34998"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=34998"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=34998"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}