VC Handbook PDF

Table Of Contents
Landscape Of Venture Capital Investors In India 4
Sample Term Sheet For Early Stage Investments 9
Negotiating Term Sheets - When to say “Yes!” & 18

How to Prepare for the Future
Investor Value - add - the Myth and Realty 27
Regulation of P2P Platforms in India 31
2
Directory Section
Active Incubators 40
Acive Accelerators 47
Angel Networks 49
Individual Angels 53
Co Working Space 58

Deal Platforms 61
Seed Funds 63
Early Stage Investors 69
Social VC Funds 82
Healthcare Funds 87
Active SME Investors 88
3
Landscape of Venture Capital
Investors in India
Typical Investment Accelerators Incubators

< Rs.50 Lakhs 500 Startups IIM-A
TLabs Venture Center
VentureNursery NSRCEL
GSF Accelerator SINE
Typical Investment
Chennai Angels
Rs.50 Lakhs - 2 Crores Angel
Hyderabad Angels
Networks
Indian Angel Network
Mumbai Angels
Typical Investment Seed Blume Ventures

Rs.50 Lakhs - 2 Crores Level Funds Orios Venture Partners
India Quotient
Kae Capital
YouWeCan Ventures
YourNest Angel Fund
Typical Investment
Rs.2 - 10 Crores VC Funds Accel India
Early Stage Lightspeed Ventures
IDG Ventures India
Inventus Capital
Nexus Ventures
Sequoia Capital India
Ventureast
4
Landscape of Venture Capital Investors in India
Typical Investment
Rs.10 - 25 Crores
VC Funds Exfinity Fund

Growth Stage Helion Ventures
Kalaari Capital
Nexus Ventures
SAIF
Sequoia Capital India
SIDBI VC
Stakeboat Capital
Typical Investment
Rs.25 - 100 Crores
Aditya Birla PE
PE Investors
Bessemer
SME Focused
Eight Roads Ventures
Gaja Capital
IFC
Lighthouse Funds
Matrix Partners India
Mayfield
NEA
Stakeboat Capital
Tiger Global
Zephyr Peacock
5
6
Ventureast
www.ventureast.net
Ventureast is one of the longest standing venture Some marquee investments:

capital fund managers in India, investing since Portea Medical, Indus OS, Goli Vada Pav, Atyati,
1997, and managing $400+ million of AUM. Little Eye Labs, Sresta (24 Mantra), Polygenta, Loylty
Rewardz, Diabetomics, Seclore, Moschip.
Ventureast is one of the first, home grown,
consistently early-stage focused fund managers Preferred Sectors:
in India. It is also one of the few that has built Technology (Mobility, Cloud, IoT) and technology-
dedicated teams and funds, investing in technology enabled (Fintech, Education, Digital Healthcare) Life
sectors, and separately in life-sciences related science and Clean Environment; Seed and incubation
sectors. Ventureast’s funds include: a successful and stage businesses.
first ever, public-private-partnership with a state
government (APIDC); the first life-sciences focused
Venture Fund in India (Ventureast Life Fund), one
of the first seed stage funds which leverages the
technology expertise of a leading educational &
research institution (Ventureast Tenet Fund with
IIT Madras); and piloted a first of its kind micro-
equity fund for small businesses. Our hallmark has
been to build companies to leadership from early-
stage through innovation.
With a team of about 20 investment professionals

operating from Bangalore, Chennai and Hyderabad,
Ventureast has made close to a 100 investments
and boasts a number of marquee repeat investors
globally. Its investors include global multi-lateral
institutions such as IFC Washington, CDC UK, &
FMO Netherlands; and leading Indian financial
institutions such as Life Insurance Corporation of
India (LIC), Oriental Insurance, SIDBI, Bank of
Baroda, and Indian Overseas Bank (IOB), among
many others.
Contacts: Hyderabad:
Bangalore: “Ventureast Plaza”, Plot No. 40 & 41, Financial
9/2-1 Museum Road, Bangalore, Karnataka 560025 District, Behind ICICI Bank, Gachibowli Post,
Phone: +91-080-2558 0045 Nanakramguda, Hyderabad, Telangana - 500 032
Chennai: Phone: 040-6551 0491

Module No.B6/5, IIT Madras Research Park, D3/1, Email:info@ventureast.net
32 Kanagam Road, Taramani, Social: @Ventureast 7
Chennai, Tamil Nadu 600113
Propelling Towards Growth
Over 50 years of combined experience in venture capital and private equity.
Stakeboat Capital LLP is a value oriented,

alternative investment firm, focused on small
Track Record
and medium companies. Stakeboat Capital Our founders have been involved with number
LLP is founded and managed by members of portfolio companies in their previous stints
who have strong experience in building and/ with various PE/VC firms. They have been able
or investing in large multi-million dollar to create a strong repository of success stories
businesses through organic growth and & possess immense industry knowledge.
inorganic acquisitions, both in India and
abroad. The members have been associated
with the Indian venture capital and private
Focus
equity industry over the last 28 years either A. Sectors of focus: Enterprise Software and
through investing or raising capital. They Technology, Healthcare, Agro and Food,
have invested in or founded companies Logistics etc
whose current market capitalization is in B. Investment Ticket size: Rs 10 - 50 Crores
C. Stage of Target companies: Revenue of Rs 10 –
excess of USD 8 billion.
200 Crores
Contact Us
Bengaluru:
Whitefield - Old Airport Main Road, Whitefield, Bengaluru - 560066
corporate@stakeboat.com
8
Term Sheet
For Subscription Of Securities
Of ABC Private Limited
This term sheet dated January 1 2016 (“Term Sheet”) sets out the terms and conditions of the proposed
subscription of convertible preference of ABC Private Limited (the “Company”) by XYZ (“Investor”).
This Term Sheet summarizes the principal terms proposed by the Investor with respect to its investment
in the Company (“Transaction”). This Term Sheet should not be construed as including all the terms
relating to the Transaction. Such terms would be contained in the definitive agreements recording the
Transaction to be negotiated and executed by all the parties (“Definitive Agreements”).
Parties hereto shall act in good faith to negotiate, complete and execute Definitive Agreements and
related documents reflecting the intent contained herein latest by February 1, 2016 (“Term”).
This Term Sheet shall expire on the completion of the Term or execution of Definitive Agreements
between the Parties, whichever is earlier. Upon termination, this Term Sheet, except for the exclusivity,
confidentiality, governing law and dispute resolution provisions, shall lapse automatically, unless
renewed by mutual consent of the parties hereto.
Capitalized terms used herein but not defined shall have the meaning ascribed to them below.
TRANSACTION
1. Parties a) The Company;
b) Promoters; and
c) The Investor.
2. Shareholding Pattern The shareholding pattern of the Company as on the date
of this Term Sheet is set out in Schedule I.
3. Investment a) The Company is desirous of raising funds through

issue of convertible preference shares (“CPs”) at a
price per CP of INR 100 (One Hundred Only).
9
Term Sheet
For Subscription Of Securities Of ABC Private Limited
b) The Investor is desirous of subscribing to 100 (One

Hundred)CP (“Investor CPs”) for an aggregate value of
INR 10,000 (Ten Thousand Only) (“Transaction”).
c) The shareholding pattern of the Company as on the date
of completion of the Transaction is set out in Schedule II.
4. Terms of Investor CPs a) Dividends: The holders of the Investor CPs shall be
entitled to an interest of [0.1%] per annum.
b) Liquidation Preference:
1)Preference: [1x][the investment amount plus
accrued Interest.]
2)Participation:[Non-participating][Full participation
on as converted basis with equity shareholders.] [Investor
will start participating once the Investor has received a
rate of return of xx% on its full investment amount.]
c) Conversion:
1)Holders of Investor CPs shall have a right to convert
Investor CPs into equity shares of the Company at any
time after or simultaneous with the issuance of equity
shares or other instruments compulsorily convertible
into equity shares by the Company to institutional
investors (“Series A Funding”).
2)The conversion price of Investor CPs shall be [xxx]%
of the price per equity share determined at the time of
Series A Funding.
3) If the Series A Funding does not occur before
[xxx] (“Series A Funding Date”), the Investor shall be
entitled to convert the Investor CPs to at a conversion
price equal to [xxx%] of the fair market value of equity
shares determined by an independent valuer as per the
valuation methodology prescribed under the applicable
laws.
5. Completion of the Within a reasonable time after execution of this Term Sheet
Transaction but in no event later than February 15, 2016.
10
Term Sheet
6. Board and General Investor will have a right to nominate one person to the
Meetings / Minority Board of Directors of the Company.
Protection
Company will not take any of the below mentioned actions
without express written approval of the Investor; provided
that, if such action or decision is taken at a board meeting
the affirmative vote of a Director nominated by the Investor
will be required:
a) Sale of assets except in the ordinary course of business.

b) Acquisition of other businesses, creation of joint ventures/
partnerships, creation or investment in subsidiaries.
c) Capital expenditures or acquisitions of assets in excess
of the amounts specified in the annual business plan
approved by the Board.
d) Increase, decrease or other alteration or modification in
authorized or issued share capital, or creation or issue
of other securities (including equity shares, preference
shares, non-voting shares, warrants, options, etc.).
e) Related party transactions.
f) Amendments to Memorandum or Articles of Association
(including change in the number of Board members).
g) Approval of, or amendment to, the annual business plan.
h) Commencement of any new line of business.
i) Debt/equity ratio exceeds the limit specified in the
business plan of the Company approved by the Board.
j) Settlement of any litigation or arbitration proceedings.
k) The giving of security for, or the guaranteeing of debts of
any person in excess of the limits specified in the annual
business plan of the Company approved by the Board.
l) Declaration or payment of any dividend.
11
Term Sheet
m) Setting up of salary and benefits of any employee with

a total cost to the company or any subsidiary exceeding
the limits specified in the annual business plan of the
Company approved by the Board.
n) Amendment or termination of any agreement appointing
key executives of the Company.
o) Any commitment or agreement to do any of the foregoing.
7. Information Rights The Company will deliver to the Investor: (a) annual audited
financial statements 90 days after the end of each financial
year, (b) bi-annual unaudited financial statements, and (c)
Annual management reports, plans and budgets.
8. Further Financing (New Any future issue of equity or convertible instruments by the
Shares)/ Anti-dilution Company shall be first offered to the existing shareholders in
the ratio of their shareholding in the Company at the time of
issuance.
Should any shareholder not subscribe to its portion in the

rights offering, the same shall first be offered to the other
shareholders in proportion to their shareholding in the
Company. This shall be repeated until such time the entire
un-subscribed portion is subscribed.
The conversion price of the Investor CPs will be subject to a

[full ratchet / broad-based / narrow-based weighted average]
adjustment to reduce dilution in the event that the Company
issues additional securities (other than shares issued pursuant
to employees’ stock option plan) at a purchase price less than
the applicable conversion price. The conversion price will
also be subject to proportional adjustment for split or sub-
division of equity shares, stock dividends, combinations,
recapitalizations and the like.
12
Term Sheet
9. Investor’s Right to Sell a) Investor CPs shall be transferable to any person after the
Series A Funding Date.
b) The Promoters shall have the right of first refusal [or first
offer right] on transfer of all or any of the Investor CPs or
any transfer of equity shares issued upon conversion of
Investor CCD’S in proportion to their shareholding in the
Company.
c) If at any time the Promoters transfer more than [xxx] %
of their shareholding in the Company to a third party,
the Investor shall have a right to tag along its CPs in
the Company on a pro rata basis to the purchaser of the
Promoters’ shares on the same terms and conditions
applicable to the transfer of the Promoters’ shares. However,
if as a result of Promoters transfer, the shareholding of the
Promoters collectively in the Company would fall below
[51%], the Investor shall be entitled to tag all of his CPS
or equity shares issued upon conversion of CPs to the
purchaser of Promoters shares
10. Promoters Drag Along If the Promoters at any time propose a transfer to a third party
Right transferee all or portion of their collective shareholding that is
in an aggregate equal to 51% of the collective shareholding of
the Promoters, then the Promoters may also elect to require
the Investor to also transfer, to the third party transferee, as
part of the drag along sale, that number of Investor CPs or
equity shares issued upon conversion of equity that is pro rata
to the shares proposed to be transferred by the Promoters, at
the same purchase price and other terms that are applicable
to the Promoters shares.
11. Non-Compete Promoters jointly and severally agree not to directly or

indirectly invest, collaborate or associate in whatsoever
manner with any person, partnership firm or a company
engaged in the similar business lines of the Company.
13
Term Sheet
MISCELLANEOUS
12. Exclusivity Until expiry of the Term, Company will not take any action
to, directly or indirectly, encourage, initiate or engage in
discussions or negotiations with or provide information to,
any other person or entity concerning the Transaction.
13. Conditions Precedent The obligation of the Investor to consummate this Transaction
(“Closing”) shall be subject to fulfillment of the following
conditions, including but not limited to:
a) Completion of business, legal and accounting due
diligence by Investor of the Company and resolution of
the due diligence findings to complete satisfaction of the
Investor.
b) Both parties having obtained corporate authorizations
for execution and performance of the transactions
contemplated under the Definitive Agreements. [Investor
having obtained the approval of its investment committee.]
c) Execution of Definitive Agreements and closing
documents (including amendments to the Articles of
Association) satisfactory to the Investor.
d) Each of the Company and the Promoters providing
representation and warranties customary in a transaction
of similar nature.
e) No existing or imminent material adverse change in the
Company.
14. Expenses All costs and expenses in connection with the issuance of
Investor CPs, including stamp duty, shall be borne by the
Company. Each party shall bear its own legal and other costs.
14
Term S Term Sheet
15. Confidentiality Investor shall maintain confidentiality, regarding the contents
of this Term Sheet, and the business and affairs of the
Company. Investor shall be permitted to disclose all aspects
of this Transaction to the investment bankers, accountants,
legal counsel and in so far as it is disclosed in each case only
where such persons are under appropriate nondisclosure
obligations imposed by professional ethics, law or contracts.
Nothing contained herein shall affect the ability of the Parties
to make disclosure under applicable law.
16. Amendment The Parties may amend the terms of this Term Sheet by
mutual consent in writing.
17. Governing Law and Any disputes arising out of or in connection with the validity,
Dispute Resolution interpretation or implementation of this Term Sheet shall be
governed by the laws of [India] and Courts at [Bangalore]
shall have sole jurisdiction.
18. Binding This Term Sheet is subject to the execution of Definitive

Agreements and completion of the Closing conditions and
is not legally binding on the parties, except for the following
sections: Exclusivity, Confidentiality and Governing Law and
Dispute Resolution.
15
Term Sheet
For ABC Private Limited

____________________________
Name: o/o/o/o
Designation: Director
Promoters
____________________________
Name: o/o/o/
____________________________
Name: o/o/o/
Investor
____________________________
Name: [/] [/]
16
About The Firm
Tatva Legal is a full service law firm with offices across five locations in Bengaluru, Chennai, Gurgaon, Hyderabad
and Mumbai founded in 2010 with 16 Partners and 80 Lawyers. The firm acts for both national and international
clients.
As a full service firm, Tatva Legal provides a broad range of legal services whilst focusing on its core areas of
practice corporate advisory, private equity and mergers and acquisitions, banking and finance, infrastructure,
real estate and dispute resolution. The M&A team has extensive experience in representing private equity players,
venture capitalists and corporates (including several Fortune 500 companies) in a multitude of specialized and
sophisticated transactions, in both domestic and cross border deals.
The firm has an active practice in advising Banks and Non-Banking Financial Companies in their fund deployment
including listed corporate bonds, mezzanine debt and lending. The firm is highly recommended for Real Estate
transactions and has advised Developers, Funds and End Users like Hotels & Hospitals, SEZ, IT Parks across
India. The other areas of Practice include Insurance, Competition / Anti Trust, Projects Technology & Dispute
Resolution.
N.K.Dilip
nk.dilip@tatvalegal.com
Tel. +91 80 43311433
About Author
Raghunath Ananthapur
Partner
Tel: +91 80 43311408
Mobile: +91 9900192977
Email: raghunath.ananthapur@tatvalegal.com
Raghunath graduated in law from Bangalore University in 2000 and has also obtained a Master’s degree in
International Business Laws from the University of Hull, U.K. He is a Solicitor, with the Law Society of England
and Wales (non-practising), and Barrister, Lincoln’s Inn (non-practising).
Raghunath’s area of practice includes: corporate laws, commercial contracts, foreign direct investment advice,
venture capital and private equity, IP and IT advisory and transactional work, software licensing, telecom and
labour laws.
Raghunath has worked with leading law firms in India and was an in-house legal counsel with an IT products
and Services Company.
17
Negotiating Term Sheets
When to say “Yes!” & How
to Prepare for the Future
The former British Prime Minister, Harold Macmillan once said (albeit in a totally different context of the Cold
War) that “[t]o jaw-jaw is always better than to war-war”. However, these words do somehow ring true when
considered in the context of negotiating a term sheet. A term sheet, being or representing a “memorandum of
understanding”, is crucial to an investment transaction as it lays out the preliminary non-binding terms and
conditions (or, heads of a “commercial handshake”, so to speak), based on which the definitive deal documents
or agreements are later finalized and the resulting investment, made.
Typically, a term sheet lays out the details of the proposed investment including the price and valuation at which
the incoming investor is investing, the nature of the instrument being subscribed to, the inter se rights of the
shareholders including the incoming investor, valuation protection for the shares proposed to be issued as well
as the events leading to an exit for the investor. As with all commercial agreements or documents, the above
listing of the various clauses in a term sheet is merely an indicative identification of the ordinary contents of
such a document; the variations in such terms, all being matters of mutual contractual understanding, are as
many as the commercial human mind, on both sides, can devise and each reinforces the nature of this agreement
being a “terms sheet”, in essence. It forms the skeletal structure of a transaction, and records the parties’ initial
understanding on a non-binding basis. However, it forms an important part of the process subsequently at the
time of finalization of definitive documents, as having agreed to specific terms, the parties are reluctant to deviate
from the same.
In the interest of expediting execution, parties often tend to negotiate a condensed form of a term sheet. However,
it is advisable to lay out the detailed terms and conditions, in order to avoid ambiguity and hence prolonged
discussions when drafting the definitive documents. This also results in closure of an investment transaction in
a timely and effective manner. Having said that, the procedure and dynamics of these rights and obligations can
be excluded from the ambit of the term sheet and may instead be fleshed out in the definitive documents.
We have attempted to list out below, the key rights and obligations which are contained in a standard form
term sheet involving a primary fund raise by a company. While the position with respect to these rights and
obligations is mostly based on and derived from industry practises, some of these may vary depending on the
stage at which the investee company is in its life cycle. Typically, a company raising funds from a private equity
player would be a growth company, and this would afford the promoters a higher negotiation leverage in terms
of their obligations. A company which is in its early stages and raising monies from venture capital players will
mostly witness stringent obligations and limited rights, with the promoters being liable for most acts, as the
investor decides to invest relying solely on the representations given by the promoters.
The key terms of a term sheet, together with the way they are customarily negotiated, are as follows:
18
When to say “Yes!” & How to Prepare for the Future
1. PRE-EMPTIVE RIGHTS
Pre-Emptive rights, as the term suggests, is a right given to an investor to participate in a future fund raise, on
the same terms and conditions as may be advanced to a potential new or further-round investor. This right is
granted in order to enable the investor to maintain its proportionate shareholding in the company and to ensure
that the investor does not get diluted on account of such future fund raise. There are, as is the case with most
rights, certain exclusionary events to which the pre-emptive right does not apply. These may include, amongst
others, issuance of employee stock options, consolidations and share splits, occurrence of a listing event and
conversion of preference shares.
This right works hand in hand with the anti-dilution and valuation protection rights, which afford the right holder
the opportunity to preserve the value of its investment in the event of a down round. The recent market trends
have revealed promoters’ interest in retaining pre-emptive rights for themselves, in order to avoid dilution of their
stakes. Retaining this right for the promoters for an early stage company might practically be futile, considering
the promoters may not have the ability to effect such a right and participate in the fund raise. Nonetheless, it
might be worth considering retaining this right for a promoter, in order to establish a precedent for a potential
investor in a subsequent fund raise.
2. BOARD OF DIRECTORS’ RIGHTS

An investor ordinarily demands a “board seat” for itself, which is in the nature of a right to appoint a non-
executive director to and on the reconstituted Board of Diretors of the investee company. The promoters would
of course also have representation on the Board, whether themselves (which is typically insisted on by the investor
as representing the promoters’ “skin-in-the-game”) or by way of an ability to nominate a third person to the
Board. The term sheet, while capturing the Board composition, more often than not fails to contain provisions
pertaining to the cessation of the Board seat, leading to much discussion at the time of the definitive documents.
It is advisable to stipulate the provisions relating to removal, reappointment and fresh appointments of directors,
at the time of finalizing the term sheet itself.
While the Board seat for an investor may fall away on the investor ceasing to hold a certain percentage shareholding,
the Board seat for a promoter may be linked to both shareholding as well as his/her employment in the company.
A standard provision would state that the promoter would lose the seat on the earlier of him/her ceasing to hold
any shares or ceasing to be an employee of the company. One of the promoter considerations would be to ensure
that the Board seat continues in the event of a termination of employment without cause. Considering this
becomes a sticky point eventually, it is advisable to specify the understanding in the term sheet.
3. TRANSFER RESTRICTIONS
The premise of an investor investing in the company is that its shares are freely transferrable; at least, from a
mutually commercially agreed perspective (although the law does stipulate that a private company must as a
general construct, restrict the ability of its shareholders to transfer their shares). However, it is essential to
19
provide for a ‘no multiple exercise’ construct. This essentially requires management and consent rights to be
exercised as a block by both the investor and its transferees. This is to avoid duplicity, or rather, multiplicity of
rights, and hence the consequential operational inflexibilities associated therewith, which is in the interest of
both the company and the investor.
Given the fact that the promoter provides a backing to the company, the promoter’s shares are usually subject
to transfer restrictions. These can be in the nature of a lock-in period within which the promoter is barred
from selling his/her shares. Transfer restrictions may also include the right of first refusal (‘RoFR’), right of first
offer (‘RoFO’) and tag-along rights granted to the investor on promoters’ shares. It is imperative for a promoter
to negotiate liquidity for himself/herself, which can be in the form of inter se transfers amongst promoters or
transfers to relatives for tax planning purposes. Another provision that is usually negotiated is the investor’s
RoFR or RoFO falling away upon the investor ceasing to hold a certain percentage of shares in the investee
company.
While generally a RoFR is seen as investor friendly (in that the promoter who wishes to sell must ‘discover’
both price and prospective buyer for the investor to then consider exercising its first right to purchase or reject),
a RoFO is favourable to the promoter in that the establishment of the valuation of the proposed sale is the
investor’s responsibility (who often will say ‘no’ to such a right for this precise reason as it is difficult for it to
spend resources discovering such price) and the identification of the prospective buyer is differed to until the
investor first decides whether or not to exercise its RoFO.
One of the most negotiated restrictions continues to be the transfer of shares to a competitor, which is barely
negotiated at the term sheet stage. Given the discussions revolving around this provision, it is best to capture the
understanding pertaining to a competitor restriction in the term sheet. This restriction, if agreed to be retained,
should explicitly be made applicable to all shareholders and may fall away with respect to an investor on breach
by the promoter or the company of the agreed terms or in an event of default situation. The mechanics of what
constitutes a competitor should also be laid down in the term sheet.
4. INDEMNITY
Negotiating an indemnity construct, is much like a quest for the holy grail, with each party trying to secure its
position in the best possible way. The company and the promoters provide the investor with certain representations
and warranties which are business and title related. These representations and warranties may be given severally
or jointly or both, and are advanced as of the execution as well as of the closing or completion date. The investor
may also expect future looking covenants to be included, which has the effect of the company and promoters
agreeing to comply with certain provisions after the closing date. The breaches of these provisions trigger an
indemnity event. Once triggered, the investor may seek indemnification from the indemnifying party if such
breach results in a loss in the hands of the investor. The extent and scope of the indemnification, together with
the cap applicable on such indemnity, both in monetary terms as well as time limitations, should not be deferred
and specifically be provided for in the term sheet as this has a tendency of souring the negotiations subsequently,
with the parties insisting that the same was not agreed to in the term sheet.
20
All of this is easier said than done, because under Indian law the jury is still out on how an Indian court is likely
to interpret a contractual indemnity clause for such breaches of representations and warranties, when the law
provides for the right to rescind the contract in the case of a mis-representation and damages for breaches of
warranties – the nub of the issue is whether indemnity is apposite for mis-representations or warranty breaches
typically addressed in law through rescission rights and damages remedies, respectively, in a situation when the
loss measure (namely, the indemnity) itself is contractually agreed. That technical question is best left to the
lawyers to advise on, depending on whether one is representing the investor or the promoter!
5. EXIT RIGHTS AND EVENT OF DEFAULT

Considering that most investors foray into a financial investment space, the exit options and their triggers are
agreed to upfront. Exit may be provided at the end of an agreed period of time by way of a stock exchange listing,
strategic or third-party sales, buy back (which is often seen as the last resort), etc. Sometimes there may also be
a waterfall of rights, with some exit rights being given priority over the others.
Additionally, a material breach or event of default situation may also result in an acceleration of these exit rights
at the option of the investor. Investors also insist upon retaining a drag along right, which allows them to force
the dragged shareholders to sell their shares in the event of a material breach or event of default situation. While
retention of a drag along right is perceived to be fairly standard, the concern surrounding the inter play between
this right and promoter’s rights cannot be emphasised enough.
Considering that this drag along right is often perceived to be a ‘last resort’ measure (as are buy-backs or
repurchases of shares by the promoters or the company, respectively), usually the company and promoters insist
that this right should only be effected upon the dragging investor selling 100% of its stake. The rationale behind
this commercial imperative for the promoters is that a promoter and other shareholders should only be dragged
so as to make up for the shortfall in the number of shares that the proposed buyer may be desirous of purchasing.
In certain situations, an investor may not be agreeable to such a construct (for the reason that its presence may
hinder the attractiveness of its sale or exit in the first place), in which case alternative exit mechanisms including
buy back or put options may be agreed to in order to ensure that an investor is assured of an exit. In companies
having multiple institutional investors, it may well do to lay out the specifics of a “tag within drag” scenario and
the specifics of investor(s) holding a certain threshold for it to be able to initiate a drag, to ensure alignment of
understanding amongst all the parties.
6. LIQUIDATION PREFERENCE
The liquidation preference forms a vital point of negotiation in a transaction. This provision governs the priority
of distribution of proceeds to the company’s shareholders on the occurrence of liquidation events, such as winding
up, sale of the company’s assets / businesses, restructuring events like mergers, acquisitions, change in control,
etc. Simply put, the investor is guaranteed payment of the investment amount, i.e., 1x (or a multiple thereof,
as negotiated), in priority over other shareholders. Investors in seed rounds may settle for a 1x liquidation
preference, but this may vary depending upon the stage of funding, with investors negotiating up to a 2x or 3x
liquidation preference.
21
A key point for consideration is the type of liquidation preference: participating or non-participating. A
participating liquidation preference provision permits the investor to recover the initial investment amount (or
a multiple thereof), along with having the right to participate in the remnant proceeds of the liquidation event at
the time of its distribution to the other shareholders. This is customarily referred to as ‘double-dipping’, for the
investor stands to receive both, the investment amount as well as remnant liquidation proceeds when participating
with other shareholders in the liquidation event. A non-participating liquidation entails the investor receiving
only the liquidation preference, and not having a right to “participate” in the proceeds of the distributions made
to the other shareholders. Promoters therefore prefer a non-participating liquidation preference, while investors
may insist on a participating liquidation preference.
When agreeing to the type of liquidation preference, promoters would do well to perceive its potential consequences
in future rounds of investments. This means specifically agreeing if the existing investors’ liquidation preference
would be subject to or be pari passu with the incoming investor’s right or if the last of the monies received will
have a first liquidation preference. Another aspect worth delineating is the liquidation event itself, especially
when the company has subsidiaries which might restructure in the near future. A restructuring event at the
subsidiary level might, from an investor’s perspective, trigger a liquidation event and may require payments to
be made therefrom to the investor, making it important to outline the intention in the term sheet.
And, finally, bear in mind that a liquidation or a distribution preference occurs ideally, not when the company is
wound-up but when there is an unlocking of value in terms of a transaction occurring involving the company,
but then to ascertain whether the obligation to distribute proceeds lies in the hands of the company or some or
all of its shareholders’, respectively.
7. CESSATION OF RIGHTS AND OBLIGATIONS

While the investors’ obligations and promoter rights are typically provided to fall away on the occurrence of
certain identified events, it is equally important to provide for a cessation of the promoters’ obligations and
investor’s rights on the occurrence of certain events. This could be linked with the investor’s shareholding falling
below a certain threshold or an investor refusing an exit even though the same may be provided in line with the
agreed terms. Recent trends have seen the promoters pushing hard for their transfer restrictions falling away as
well as insisting that investor rights, including in some cases the drag along right, be subject to a certain threshold.
8. NON-COMPETITION RESTRICTIONS
Investors seek to impose non-competition and non-solicitation obligations on the promoters. These restrictions
are applicable for a defined period, however the scope is usually broad in nature and may restrict the promoter
from even holding investments in public entities or passive financial investments in private companies. The
promoters should consider making a carve out for these matters. Further, in the event the non-competition
period is linked to employment of a promoter, it may well be a viable option to exclude the applicability of this
provision in the event of a termination of employment without cause or more generally upon any termination or
cessation of such employment, because the law in India is clear on the point that a post-employment restriction
of such competition is invalid and unenforceable.
22
CONCLUSION
Considering that investors act as partners in the company post their investments, one must remember that the
idea is to facilitate the deal while at the same time ensuring that the mutuality of interests of the various parties’
on several sides are safeguarded, and risks if any, are mitigated to ensure a meaningful association. While one
empathises with and understands the bitter taste that some recent developments in the private equity industry
may have left, it is imperative to focus on the long-term associations and gains, and work together to achieve
the same. A well thought out and detailed term sheet can help achieve just that, having the ability to lead an
investment transaction to its intended closure in an effective manner, while at the same time ensuring a friendly
eco system, with the market players left to direct their energies and expertise into achieving a mutually beneficial
industry.
Viewed thus, the negotiation of a term sheet is a matter of adjustment of contractual rights and obligations on the
various sides of a proposed investment transaction. The key players are obviously the investors, on the one hand,
and the founder or the promoters, on the other. But amidst this construct, there are various other parties whose
interests are involved and who often play a vital role in concluding a term sheet negotiation -- illustratively, for
instance, existing investors and key management. Ultimately, if all key players interested view the economic
entity of the investee company having both rights and obligations of its own, especially under law, but also
being the venue within which all other stakeholders’ rights and obligations need to be adjusted to promote the
economic success and stability of the company as a whole for growth and returns in the years ahead, the term
sheet thus negotiated would have achieved its purposes for now and for the future.
23
About The Firm
Founded two decades ago in 1997, Argus Partners has established itself as a leading law firm in India admired for
providing consistently quality services. The Firm was formerly known as Udwadia Udeshi and Argus Partners
and was renamed as Argus Partners in May, 2015. In 2016, the Firm expanded significantly with the addition
of a fully revamped Bangalore office and team consisting of professionals of many years’ experience joining the
Firm in a fresh entrepreneurial push to expand and grow our practices and footprint.
Argus denotes constant vigilance and steady observance. At Argus Partners, we believe in keeping a watchful
eye on the needs of our client and on the developments in the business of our client. This enables us to create
and deliver products which dovetails with their needs and business realities. Argus Partners comprises dynamic,
ambitious and vibrant lawyers who are extremely confident to be able to offer the most efficacious legal solutions
to our clients’ business needs.
At Argus Partners, our endeavour is to establish a personal relationship with our client. The realms of a lawyer
client relationship traverses beyond assignments. We aspire to be the trusted advisors to all our clients. Therefore,
our approach is to treat each client as our only client. We strive to understand their business, aspirations,
concerns and constraints to provide solutions and structure transactions in a manner so as to enable them to
efficiently overcome business challenges and effectively achieve their goals. With offices with significant and
diverse presence and practices in Mumbai, Delhi, Kolkata, Chennai and Bangalore, the Firm – with close to 60
lawyers countrywide – has built a formidable reputation for its work and has been acknowledged and appreciated
by its clients and peers for providing quality services. Presence across India gives the Firm a distinct advantage
in serving its clientele that includes industry and business leaders in all segments of the market.
We can best be reached at bangalore@argus-p.com; and we would be happy to direct you to the appropriate
professional in any of our offices across the country.
We can also be contacted at the following telephone numbers of our respective offices:
Mumbai Delhi Kolkata Chennai Bangalore

+91 22 67362222 +91 11 2370 1284 +91 33 4065 0155 +91 44 2498 5814 +91 80 4646 2300
24
About Author
Siddharth Raja
Senior Partner and National Executive Director
E-mail.: siddharth.raja@argus-p.com
Mobile: +91.98453.71357
A corporate lawyer with almost two decades of experience, Siddharth focuses on private equity and venture capital
transactions; possessing cutting-edge expertise in cross-border and domestic M&A. As a senior corporate law
specialist, Siddharth has of late, developed a keen interest, as well as a rapidly growing practice, in the burgeoning
area of corporate insolvency resolution and bankruptcy in India.
A Gold Medalist with a B.A., LL.B. (Hons.) degree from India’s renowned National Law School of India University,
Bangalore, in 1997, Siddharth also holds an LL.M. in International Economic Law from the University of Warwick’s
Law School in the U.K., where he was a British Council & Foreign and Commonwealth Office Chevening, as well
as a J. N. Tata, Scholar, in 1998.
Siddharth began his career in 1998 with the Firm (then known as Udwadia, Udeshi & Berjis). Prior to becoming
a Partner in 2004 and heading the Firm’s Bangalore and Chennai teams and offices, he spent several years (2001
– 2004) handling cross-border M&A and investment matters at the international law firm, O’Melveny & Myers
at its Hong Kong office, where he was a member of that firm’s China team and practice. In 2006, Siddharth co-
founded Narasappa, Doraswamy & Raja that merged to form Samvad: Partners in 2013, where he was also one
of the co-founders.
Siddharth merged his practice with Argus Partners in 2016 and is currently a Senior Partner and National
Executive Director of Argus Partners based in the Firm’s Bangalore office, along with responsibility for, and
oversight of, the Firm’s Chennai office and practice.
Siddharth has regularly demonstrated his interest in academics and is or has been a Visiting Professor in various
institutions including NLSIU, Bangalore; Jindal Global Law School; Department of Management Studies, Indian
Institute of Science; and the Indian Institute of Management, Bangalore. He is also associated as a Visiting or
Guest Faculty with the think-tank, The Takshashila Institution.
25
About Author
Ankita Gupta
Associate
E-mail.: ankita.gupta@argus-p.com
Mobile: +91.9740154314
Divya Mirlay
Associate
E-mail.: divya.mirlay@argus-p.com
Mobile: +91.78293.51957
Ankita Gupta is a corporate and commercial lawyer with particular focus on mergers and acquisitions, private
equity and venture capital transactions and has represented several investment funds and companies in
transactions involving primary investments, business and asset transfers and share acquisitions. She regularly
advises clients on corporate, foreign exchange and regulatory lawsincluding providing structuring advice.
Prior to joining the Firm, Ankita was an Associate at IndusLaw, Bangalore where she played an active role in
assisting clients withgeneral corporate matters, cross border and domestic transactions. She has advisedindustry
participants in making investments in portfolio companies involved in the education, pharmaceutical,
e-commerce and technology sectors. Ankita graduated fromILS Law College, Pune, Maharashtra, and is enrolled
with the Bar Council of Maharashtra & Goa.
An avid reader, Ankita also takes a keen interest in legal writing and has contributed to several legal articles and
papers pertaining to the private equity practice. In her spare time, Ankita likes to read, watch movies, meetpeople
and try her hand at cooking.
Divya Mirlay is an Associate at Argus Partners, Bangalore, and works on private equity/venture capital
transactions, mergers, and general corporate matters. She recently graduated from the School of Law, Christ
University, Bangalore, and is enrolled with the State Bar Council of Karnataka. Divya avidly follows technology
and virtual currency-related developments. In her free time, Divya pursues stand-up comedy and participates in
marathons
26
Investor Value-add- the
Myth and Realty
There have been several instances where the support of venture capital funding has given impetus
to growth of a business. It could be a technology start-up or a brick and mortar player looking for
expansion and growth opportunities. But sometimes there is hesitation in the mind of the founders
about the impact of the venture capital investment on the enterprise. Based on our experience while
advising on both sides, we have tried to analyse the following concerns voiced by the founders from
time to time, and in light of that, have evaluated the value-add from the venture capital investors to
the enterprise.
Do the founders lose control of the enterprise on receiving venture capital funding?
There are two types of venture capital investments, (i) venture capital investor acquiring a minority
stake, and (ii) control transactions, where the venture capital investor acquires a majority stake in the
entity. In case of acquisition of minority stake, the founders are more likely to be in the driving seat
and the investors are usually provided protective rights to preserve the value of their investment in
the entity.
On the other hand, as far as control transactions are concerned, though the majority stake in the
enterprise is held by the investors, we have seen that day-to-day operations of the company are left to
the founders and the management team with reasonable limits imposed by the investor. Depending
upon the performance of the enterprise, the founders can revise, dilute or do away with such limits
in future with an agreement with the investors.
It may be helpful for the founders to ensure that the removal of the founders for cause is restricted to
specific instances and is not linked to performance of the enterprise and in case of removal without
cause, the severance and up-side of the founders is protected.
Excessive burden of corporate governance
The importance of robust and transparent corporate governance mechanism has been recognised
through the amendments to the Companies Act, 2013. The JJ Irani committee while discussing
amendments to the companies act has recognised that the framework for regulation of corporate
entities has to be in tune with the emerging economic scenario, encourage good corporate governance
and enable protection of the interests of the investors and other stakeholders. The Securities Exchange
Board of India, recognising the need for improving standards of corporate governance of listed
companies in India, has set-up a committee on corporate governance on June 2, 2017.
27
Investor Value-add- the Myth and Realty
The corporate compliances may seem burdensome initially, but can go a long way in preparing the
enterprise for an initial public offer. Strong and transparent corporate governance mechanism is
also helpful for the enterprise in tracking its progress and modifying its course of action based of the
extant market circumstances. It has been our experience that the venture capital investors look for
enterprises with sound governance practices.
Investors are driven solely by profitable exits

The key objective of the venture capital investor could be to get a profitable exit before the end of
its fund life. But each such exit is dependent upon the performance of the enterprise. The envisaged
exits could be by way of initial public offer, or sale to a strategic buyer or a third party investor. The
investor can provide valuable contribution in facilitating each of these exits. In case of an initial
public offer, the track record and stature of the investor could lend credibility and lead to price
appreciation upon listing.
In case of a strategic sale or a new investor buying out the stake of the existing investor, the deep
industry connects of the investor could be of value to the enterprise.
In case there are penal consequences imposed on the founders for not providing an exit, the endeavour
should be made to ensure that such consequences are fair and reasonable. While agreeing to such
consequences, it may be helpful for the founders to keep in mind that many investments are in unlisted
private companies, and the shares held by the investors are not necessarily marketable. Therefore, the
investors could be dependent on the founders to provide an exit at end of the investment period.
Given the jurisprudence arising out of the decisions of the Delhi High Court in case NTT Docomo
Inc. v. Tata Sons Limited and Cruz City 1 Mauritius Holdings v. Unitech Limited , it is advisable that
the parties pay careful attention to the exit obligations being cast upon the founders, to ensure that
inadvertently no adverse burden is placed upon the founders.
More funds- better investor

With the investor look-out changing in last couple of years, there appears to be competition among
the venture capital investors to invest in organisations with innovative products, reliable promoters
and exciting business models. The founders need not just look for better valuations and bigger
investment amounts while choosing the venture capital investor. It may be of help to look for an
investor who has sectoral expertise, track record in similar ecosystem, or the ability to make in-roads
in the present market. There is a possibility that these intangibles could bring valuable returns than
mere additional quantum of funding at better valuation.
28
Investor Value-add- the Myth and Realty
Investor rights could interfere the running of the business

Many a times, the investor invests in multiple enterprises in its capacity as a financial investor.
Investors tend to retain rights such as information rights and affirmative voting rights with an
objective of protecting their interest in the enterprise. These rights, sometimes, may be necessitated
by the fiduciary duty owed by the fund managers to their limited partners. As long these rights are
reasonable, and do not interfere with the management of the enterprise, the founders can look at
them positively.
In India, the venture capital market and the jurisprudence around it is still evolving. Despite
speculation that deal activity may slow down with fund managers taking a cautious approach towards
fresh funding, value of private equity investments jumped a by a whopping 64 percent in May 2017
compared to the corresponding month in 2016-2017. Investors pumped in $963 million in May
2017, over $587 million in May 2016. Given the scenario, venture capital investments in India are
here to stay.
As we have seen from time to time, it is beneficial for the enterprise if the founders are realistic about
their expectations from the investors, and the investors trust the founders to steer the enterprise
in the right direction. This balancing act usually goes a long way in ensuring sound future for the
enterprise.
Dated April 28, 2017

Dated April 11, 2017
http://www.forbesindia.com/article/special/private-equity-investments-jump-by-64-in-may-2017/47249/1
29
About The Firm
Economic Laws Practice (“ELP”) is a leading full-service Indian law firm established in the year 2001
by eminent lawyers from diverse fields. The firm’s Private Equity & Venture Capital practice brings
onboard a unique understanding of commercial matters and legalese to be able to provide effective
solutions to all stakeholders in a transaction. The team looks at providing a bespoke legal service
experience, which is sector agnostic in nature and driven towards successful consummation of the
relevant transactions.
ELP advises clients on all aspects of private equity and venture capital transactions, whether from
a fund formation perspective or a potential portfolio investment or a relevant exit transaction.
Our services include right from conceptualising a structure, to conducting the legal due diligence
exercise, to the preparation of the relevant documentation, to providing assistance to the final closure
including negotiations and corporate secretarial assistance.
LP is the firm of choice for clients because of its in-depth expertise, continuous availability, geographic
reach, transparent approach, competitive pricing and most importantly the involvement of partners
in every assignment.
30
REGULATION OF P2P
PLATFORMS IN INDIA
Peer-To-Peer Lending Platforms (“P2P Platforms”) act as intermediaries that identify borrowers,
who are potentially in need of unsecured loans and connects them with potential lenders. Although,
the concept is still at a nascent stage in India, the Reserve Bank of India (“RBI”) in its consultation
paper published in April 2016 had argued that P2P Platforms require regulation in order to avoid
potential disruption across the financial sector. Subsequently the RBI has issued a notification
dated August 24, 2017, notifying that all P2P Platforms will be regulated as a non-banking financial
company (“NBFCs”) and on October 4, 2017, issued the Master Directions for Non-Banking
Financial Company-Peer to Peer Lending Platform (Reserve Bank) Directions, 2017 (“Master
Directions”), aimed at regulating the P2P Platforms.
In this article we have provided a snapshot of the significant provisions of the Master Directions.
I. Operational Model
For quick reference, a flowchart of the operations of the P2P Platforms as per the provisions of the
Master Directions is given below.
Available at https://rbidocs.rbi.org.in/rdocs/content/pdfs/CPERR280416.pdf
Available at http://egazette.nic.in/WriteReadData/2017/179038.pdf
Available at https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11137&Mode=0
31
REGULATION OF P2P PLATFORMS IN INDIA
II. Registration of P2P Platforms

An entity can undertake the business of a P2P Platform only after procuring a certificate of
registration from the RBI (“COR”) as an NBFC–peer-to-peer lending platform (“NBFC-P2P”). As
per paragraph 5(2) of the Master Directions, all existing P2P Platforms (online or otherwise) are
required to apply for a COR, within 3 (three) months from the date on which the Master Directions
come into effect.
A P2P Platform is required to satisfy certain conditions in order to be issued a COR as an NBFC P2P.
Some of these conditions are:
(i) it must be a company incorporated in India;
(ii) it has the technological and managerial expertise to offer services as a P2P Platform;
(iii) the promoter(s) and the directors of the P2P Platform are qualified as fit and proper persons;
(iv) the general character of its management is not prejudicial to public interest; and
(v) it has net owned funds of at least INR 20,000,000 (Rupees Two Crores).
Some of the conditions mentioned above are subjective in nature and RBI can exercise its discretion
to accept and reject registration applications.
III. Permitted and Restricted Activities

Under the Master Directions, an NBFC-P2P is only permitted to act as an intermediary and provide
an online marketplace or platform to the participants involved with peer-to-peer lending.
In addition to providing an online marketplace, P2P Platform(s) in accordance with Paragraph 6(2)
of the Master Directions are required to:
(i) undertake due diligence on the borrowers, undertake a credit assessment and credit risk
profiling and disclose it on the platform;
(ii) assist in preparation of loan documents; and
(iii) assist in recovery of loans (provided they ensure that the recovery staff are properly trained
and will not resort to any form of harassment).
A P2P Platform is not permitted to be involved in:
(i) raising deposits;
(ii) providing loans from its balance sheet;
(iii) providing or arranging any credit enhancement or credit guarantee;
(iv) holding the funds received from the lender or the borrower;
(v) cross selling products on the platform except for loan specific insurance products;
(vi) permitting international flow of funds; and
(vii) facilitating issuance of secured loans, etc.
32
IV. Participants
Any person, either a company or an individual, who meets the eligibility criteria prescribed by the
NBFC-P2P can act as a borrower or lender on the platform. However, please note that a Company
registered as a borrower on an NBFC-P2P Platform may not be allowed to accept loans from
individual lenders as it would amount to a breach of the Companies (Acceptance of Deposit) Rules,
2014.
RBI should have exempted applicability of the Master Directions for transactions where the lenders
are NBFCs. NBFCs are sophisticated lenders regulated by RBI which follow their own KYC norms
prior to disbursing a loan, thereby negating the risks associated with an individual acting as a lender.
V. Prudential Norms
As per Paragraph 7 of the Master Directions, the following limits have been imposed on loans taken/
disbursed on the P2P Platforms:
(i) the aggregate exposure of a lender, across all P2P Platforms, and the aggregate loans taken by a
borrower, across all P2P Platforms cannot, exceed INR 1,000,000 (Rupees Ten Lakhs);
(ii) the exposure of a single lender to a single borrower, across all P2P Platforms, cannot be more
than INR 50,000 (Rupees Fifty Thousand);
(iii) the NBFC-P2Ps are required to maintain a leverage ratio not exceeding 2; and
(iv) the maturity period of loan should not exceed 36 months.
A graded threshold for different categories of participants and their ability to sustain the exposure
without any adverse consequences would have been a better approach. The current prudential norms
will restrict the business potential of P2P Platforms, unless they are able to bring on many more
borrowers and lenders onto the platform.
The Master Directions do not specify any cap on interest rates to be charged.
There seems to be no grandfathering of the existing loans, therefore it appears that all the loans
disbursed by existing P2P Platforms, will have to be made compliant with the prudential norms as
mentioned in the Master Directions, within 3 months, prior to making an application for obtaining
COR with the RBI.
VI. Operational Guidelines

The NBFC-P2Ps are required to have an approved policy in place for:
(i) setting out the eligibility criteria for participants;
(ii) pricing of services; and
33
(iii) rules for matching lenders with borrowers in an equitable and non-discriminatory manner.
An NBFC-P2P can outsource any of its activity to a third party. However, outsourcing of an activity
will not diminish the responsibilities and obligations of the NBFC-P2P under the Master Directions.
Further, no loan can be disbursed, until the lender has approved of the individual borrower and the
participants have signed a loan agreement to that effect.
VII. Appointment of Directors

As per the specified formats in Annexure II to V of the Master Directions, the board of directors of
an NBFC-P2P are required to set out the standard ‘fit and proper’ criteria to be met by the directors
and it must be in line with the requirements mentioned in the Master Directions. Some of these
requirements include:
(i) relevant knowledge and experience;
(ii) relevant professional achievements; and
(iii) details of proceedings against the director, if any etc.
Each director appointed in the P2P Platform must meet the fit and proper criteria at the time of their
appointment and on an on-going basis to be certified on a half yearly basis.
VIII. Escrow Account

Any funds transfer between the participants on a P2P Platform should be through specifically
designated escrow accounts, which will be operated by a trustee. The trustee can be anyone promoted
by bank maintaining the escrow account. A minimum of two escrow accounts, one for funds received
from lenders and pending disbursal, and the other for collections from borrowers, is required to
be maintained. The escrow accounts are non-interest bearing. The P2P Platforms only have a view
facility and no control over the escrow account.
IX. RBI Approval for Change in Shareholding and Directors

Paragraph 16(1) of the Master Directions states that prior approval of the RBI is required by an
NBFC-P2P in the following cases:
(i) any allotment of shares, which results in shareholding of an individual or group increasing to
26% or more;
(ii) any takeover or change in control of an NBFC-P2P, which may or may not result in change of
management;
34
(iii) any change in shareholding, including progressive changes, which would result in acquisition
by an entity of 26% or more of the paid up share capital;
(iv) change of more than 1/3rd of the composition of the board of directorsof the P2P Platform,
excluding independent directors; and
(v) any change in shareholding, which gives the acquirer a right to appoint a director.
While most of the conditions mentioned above are applicable to other NBFCs, condition (v) is unique
to an NBFC-P2P. These conditions are likely to delay the investment process and should be kept in
cognizance, while deciding timelines to closing. Investors in this sector are likely to instead consider
appointing an observer on the board of directors of the NBFC-P2P, with specific rights built into the
investment agreements.
Post receipt of prior approval from the RBI, a public notice in one leading national newspaper and
one local (covering the place of registered office) vernacular newspaper is to be given indicating the
intention of such transfer and the particulars of the transferee.
X. Power to Grant Exemptions

To avoid any hardship or for any other sufficient reason, the RBI can in its discretion grant extension
of time to comply with or exempt any NBFC-P2P or class of NBFC-P2P or all NBFC-P2Ps, from all
or any of the provisions of these Directions.
XI. Disclosures
NBFC-P2P platforms are required to provide detailed information to the lender(s), including the
personal identity, amount, interest rate and credit score of the borrower(s). Similarly, the details of a
lender (except the personal identity and contact details) are required to be shared with the borrower.
A P2P Platform is required to ensure transparency with respect to its operations and is required to
publicly disclose the following details on its website:
(i) overview of credit assessment and credit score methodology and factors considered;
(ii) disclosures on usage and protection of data;
(iii) grievance redressal mechanism;
(iv) portfolio performance including sharing of non-performing assets on a monthly basis and
segregations by age;
(v) fair practices code;
(vi) business model in board terms; and
(vii) the interest rate in annualized percentage rate format.
35
About The Firm
Shardul Amarchand Mangaldas & Co (SAM & Co), founded on a century of legal achievement, is one
of India’s leading full service law firms. The Firm’s mission is to enable business by providing solutions
as trusted advisors through excellence, responsiveness, innovation, and collaboration.
SAM & Co is one of India’s most well recognised firms, and is known globally for its integrated approach.
Our 520 lawyers including 103 partners provide exceptional services across its practice areas which
include General Corporate, Merger & Acquisition, Private Equity, Banking & Finance, Insolvency &
Bankruptcy, Competition Law, Dispute Resolution, Projects & Project Finance, Capital Markets, Tax,
Intellectual Property and Venture Capital. The Firm is at the forefront of global and Indian M&A and
private equity transactions, cutting edge high risk litigation and advice on strategically important matters
across a spectrum of practices and industries for its multi-jurisdictional clients.
SAM & Co has a pan India presence with offices in seven cities across India - New Delhi, Mumbai,
Gurugram, Bengaluru, Chennai, Ahmedabad and Kolkata.
36
About The Author
Karthik Mahalingam
National Practice Head – Venture Capital
Mobile: +919987570277
Email: karthik.mahalingam@AMSShardul.com
Address: BENGALURU
Prestige Sterling Square,
Madras Bank Road,
Off Lavelle Road
Bengaluru 560 001
Karthik is the Head of our Bengaluru office and the National Practice Head - Venture Capital at the
Firm. Karthik is a nationally recognised authority in the area of venture capital and has represented
parties in many of India’s most significant financings and M&A.
The majority of Karthik’s practice involves representing venture funds in structuring investment and
global institutional investors in the venture capital field. Karthik regularly represents a diverse range of
both domestic and international clients, including industry leaders in consumer internet and mobile
services, financial and tech enabled companies.
Karthik has guided the setting up of the Impact Investors Council, an industry body to engage policy
makers and accelerate impact investments in India. Karthik is presently an editorial board member of
LexisNexis Practical Guidance, India and earlier was an active board member of Impact India Foundation
(Dasra). He also convened a Special Interest Group on Legal Affairs, Indian Private Equity and Venture
Capital Association. Karthik conceived and prepared the ‘Legal Handbook for Social Entrepreneurs’
published by Khemka Foundation.
37
About The Author
Parag Srivastava
Principal Associate
Mobile: +918433951691
Email: parag.srivastava@AMSShardul.com
Siddharth Madhavan
Associate
Mobile: +917338741128
Email: siddharth.madhavan@AMSShardul.com
Parag’s practice focuses on private equity and venture capital investments, mergers and acquisitions,
joint ventures, both domestic and cross-border.
With a solution oriented approach, Parag has advised a wide spectrum of clients including interna-
tional and domestic private equity and venture capital funds, multinational and Indian companies
across several sectors such as media, e-commerce, renewable energy, banking and financial services
and healthcare.
Siddharth focuses on general corporate matters, private equity / venture capital transactions, capital
markets and real estate financing. His expertise includes advising on transactions pertaining to the
issue / acquisition of debt / equity instruments, drafting of transaction documents for venture capital
transactions and drafting of Initial Public Offer (IPO) related documents.
38
Director y Section
39
Director y Section - Active Incubators
Abhiyan, IIM Lucknow

CIBA
Lucknow
Goa
91 90053 72642
www.ciba.org.in
http://dilbert.iiml.ac.in/~abhiyan
AIP, ICRISAT CIE, IIIT Hyderabad

Hyderabad Hyderabad
91 40 3071 3071 91 40 6653 1354
www.aipicrisat.org http://iiith.org
Amity Innovation Incubator CIIE, IIM Ahmedabad

Noida Ahmedabad
91 120 4659 000 91 79 6632 4201
www.amity.edu/aii www.ciie.co
Amrita TBI Composites Technology Park

Kollam Bangalore
91 476 280 4503 91 80 6599 7605
www.amritatbi.com www.compositestechnologypark.com
BEC STEP DKTE TBI

Bagalkot Kolhapur
91 8354 220 689 91 230 242 1300
www.becbgk.edu/step.php www.dktetbi.com
40
Ekta Incubation Centre

eHealth TBI
Kolkata
Bangalore
91 33 2367 3978
91 80 2574 3600
www.technologyembryo.com
Faraday Bicentanary Sciente Park Global Incubation Services

Guwahati Bangalore
91 361 260 6610 91 80 2520 0916
www.edccottoncollege.org www.ginserv.in
i2India IAN Incubator

Bangalore Delhi
91 80 65696979 91 11 4075 5713
http://venturefactory.in www.indianangelnetwork.com
icreate IIITB Innovation Centre

Ahmedabad Bangalore
91 79 2791 2803 91 80 4140 7777
www.icreate.org.in www.iiitb.ac.in
IKP Knowledge Park InnAccel

Secunderabad Bangalore
91 40 2348 0002 91 80 40923864
www.ikpknowledgepark.com www.innaccel.com
41
JSS STEP, JSSATE

Innovation Park, IIM Calcutta
Noida
Kolkata
91 120 240 1484
www.iimcip.org
www.jssstepnoida.org
Khosla Labs Kerala Startup Mission

Bangalore Trivandrum
91 80 4212 4272 91 471 270 0270
www.khoslalabs.com https://startupmission.kerala.gov.in
MCIIE, IIT Varanasi KIIT TBI

Varanasi Bubaneshwar
91 542 236 8948 91 674 272 5466
www.mciieiitbhu.org www.kiitincubator.in
MUTBI
MICA Incubator
Mumbai
Ahmedabad
91 820 292 5055
www.mica.ac.in/edc/mica-incubator
www.mutbimanipal.org
NDBI, NIID NDRI

Ahmedabad Karnal
91 79 2662 3692 91 184 225 2800
www.ndbiindia.org www.karnal.gov.in
42
NSRCEL, IIM Bangalore NITK-STEP

Bangalore Surathkal
91 80 2699 3769 91 824 247 5490
www.nsrcel.org www.nitkstep.org
Periyar TBI PayPal Start Tank

Thanjavur Chennai
91 4362 264 520 www.starttank.com
www.periyartbi.org
RTBI, IIT Madras PSG STEP

Chennai Coimbatore
91 44 6646 9872 91 422 436 3300
www.rtbi.in www.psgstep.org
Shriram Institute for Industrial Research SID, IISc Bangalore

Delhi Bangalore
91 11 2766 7267 91 80 2356 1298
www.shriraminstitute.org http://sid.iisc.ernet.in
SIIC, IIT Kanpur SINE, IIT Bombay

Kanpur Mumbai
91 512 259 6646 91 22 2576 7072
www.iitk.ac.in/siic www.sineiitb.org
43
SJCE STEP SRM Incubation and Entrepreneurship centre

Mysore Chennai
91 821 254 8321 91 44 2474 2836
www.sjcestep.in www.srmuniv.ac.in
Startup Oasis Startup Village

Jaipur Kochi
91 97855 44100 91 484 211 0799
www.startupoasis.in www.startupvillage.in
STEP IIT Roorkee STEP, IIT Kharagpur

Roorkee Kharagpur
91 1332 272 337 91 3222 281 091
www.iitr.ac.in www.stepiitkgp.in/entrepreneurs.html
STEP, Thapar University Tagore Center for Green TBI

Patiala Shibpur
91 175 239 3011 91 33 2668 1073
www.thapar.edu http://tcgtbi.iiests.ac.in
TBI KEC
TBI KIET
Erode
Ghaziabad
91 4294 226 633
www.tbi-kiet.in
www.tbi-kec.org
44
TBI, Anna University TBI, Bannari Amman Institute of Technology

Chennai Sathyamangalam
91 44 2235 8363 91 4295 226 322
www.annauniv.edu www.bittbi.com
TBI, BITS Pilani TBI, Graphic Era University

Pilani Dehradun
91 1596 245 073 91 111 222 3333
http://discovery.bits-pilani.ac.in/tbi www.tbigeuddn.com
TBI, IGIT Sarang

TBI, NIT Calicut
Delhi
Calicut
91 11 2659 1057
www.tbi.nitc.ac.in
www.igitsarang.ac.in
TBI, University of Hyderabad

TeNeT
Hyderabad
Chennai
91 40 2313 5002
www.tenet.res.in
www.uohyd.ac.in
TREC-STEP
TotalStart
Tiruchirappalli
Kolkata
91 431 250 0085
www.totalstart.org
www.trecstep.com
45
UDSC TBI UnLtd India

Delhi Mumbai
91 11 2411 6559 91 22 6888 8036
www.udsctbi.org www.unltdindia.org
Venture Centre Villgro

Pune Chennai
91 20 6401 1026 91 44 6663 0400
www.venturecenter.co.in www.villgro.org
VIT-TBI Woxsen Trade Tower

Vellore Hyderabad
91 40 2313 5000 91 40 4444 8888
www.vittbi.com www.woxsen.edu.in/site/Trade_Tower
46
Director y Section - Active Accelerators
500 Startups 5Ideas

http://www.500.co http://www.5ideas.in
Delhi Gurgaon
Cisco Launchpad
Axilor Ventures
https://www.cisco.com/c/m/en_in/launchpad/
http://axilor.com/
index.html
Bangalore
Bangalore
GenNext Hub Green House Accelerator

http://www.gennexthub.com/ http://www.ghvaccelerator.com
Mumbai Gurgaon
GSF Accelerator HealthStart

http://www.gsfindia.com http://www.healthstart.co.in
Gurgaon Noida
Kyron Microsoft Ventures Accelerator

http://www.kyron.me http://www.microsoftventures.com
Bangalore Bangalore
47
Director y Section - Active Accelerators
NUMA Bangalore
Paypal Start Tank
https://bengaluru.numa.co/
Chennai
Bangalore
Revvx Accelerators Spark10 - HYD

http://www.revvx.com/ https://www.spark10.com
Bangalore Hyderabad
Startup Village Startup Zone

http://www.startupvillage.in https://thestartupzone.in
Kochi Mumbai
The Startup Centre TLabs

http://www.thestartupcentre.com http://www.tlabs.in
Chennai Noida
Tracxn Labs VentureNursery

http://www.tracxnlabs.com http://www.venturenursery.com
Bangalore Mumbai
Zone Startups India

http://india.zonestartups.com/
Mumbai
48
Director y Section - Angel Networks
ah! Ventures BITS Spark Angels

Mumbai Mumbai
http://www.ahventures.in http://www.bitsaa.org/?page=sparkangels
CCube Angels
Calcutta Angels
Mumbai
Kolkata
http://www.ccubeangels.com
http://calcutta-angels.com
65 9188 0399
Chennai Angels
Chandigarh Angels Network
Chennai
Chandigarh
http://www.thechennaiangels.com
http://chandigarhangelsnetwork.com
91 44 2850 0661
CIO Angel Network

Cross Border Angels
Mumbai
Mumbai
http://www.cioangelnetwork.com
http://crossborderangels.com
91 22 4225 6500
Fireside Ventures Growx Ventures

Bangalore New Delhi
https://www.firesideventures.com http://www.growxventures.com
91 9820 866 851 91 11 4607 4000
49
Harvard Angels
GSF Superangels
Overseas - Larkspur
Gurgaon
http://www.hbsalumniangels.com
http://www.gsfindia.com
415 797 7114
Hyderabad Angels Indian Angel Network

Hyderabad New Delhi
http://www.hyderabadangels.in http://www.indianangelnetwork.com
040 4048 4444 91 11 4075 5713
Kalpataru Ventures Keiretsu Forum Chennai

Overseas - Mauritius Chennai
http://ktaru.com http://www.keiretsuforum.com
Lead Angels Mumbai Angels

Mumbai Mumbai
http://leadangels.in http://www.mumbaiangels.com
91 70456 09376 07506 711249
Native Angel Network Palaash Ventures

Madurai New Delhi
http://nativeangelsnetwork.com http://www.palaashventures.com
91 0452 439 0410 91 11 4890 0000
50
Primarc iVentures
Powai Lake Ventures
Kolkata
Mumbai
http://primarc.in
http://www.powailakeventures.com
91 84438 58632
Rajasthan Angel Investor Network (RAIN)

Quintillion Media
Rajasthan
Delhi
http://rainjaipur.co.in
https://www.thequint.com
91 0141 510 4464
Sarthi Angels
Singularity Ventures
Mumbai
Mumbai
http://sarthiangels.com
http://singularityventures.in
022 2652 8671
Sprout Angels
Splice Capital
Bangalore
Hyderabad
http://www.sproutcapital.in
http://splicecapital.com
91 80 46898000
SRI Capital
Stanford Angels
Hyderabad
Mumbai
http://sricapital.com
http://www.stanfordaande.in
51
Swan Angel Network

Swastika
Madhya Pradesh
Hong Kong
http://swanfinance.co.in
https://www.swastikaco.com
91 731 4255 100
Venture Catalysts Angels VentureNursery Angels

Mumbai Mumbai
http://venturecatalysts.in http://venturenursery.com
91 22 2851 0071 91 22 2670 1133
WaterBridge Ventures
New Delhi
http://waterbridgeventures.in
91 11 4985 6378
52
Director y Section - Individual Angels
Ajay Relan Amit Ranjan

https://www.linkedin.com/in/ajay-relan-818b89 https://www.linkedin.com/in/amitranjanprofile
https://angel.co/ajayrelan https://angel.co/amitranjan
Anand Chandrasekaran
Anand Ladsariya
https://www.linkedin.com/in/anandc
https://angel.co/anand-ladsariya
https://angel.co/anandc-1
Anand Lunia
https://in.linkedin.com/in/anand-lunia-9816a53 Anand Mahindra
https://angel.co/anand-lunia https://www.linkedin.com/in/anand-mahindra-a5959798
Aneesh Reddy Anil Jain

https://www.linkedin.com/in/aneesh-reddy-38b176b https://www.linkedin.com/in/aniljain
https://angel.co/aneesh-reddy https://angel.co/anilmjain
Anirudh Damani Anupam Mittal

https://www.linkedin.com/in/anirudhdamani https://www.linkedin.com/in/anupam-mittal-4b3b0114
https://angel.co/anirudh-a-damani https://angel.co/anupam-mittal
53
Aprameya Radhakrishna Apurva Salarpuria

https://www.linkedin.com/in/aprameyaradhakrishna https://www.linkedin.com/in/apurva-salarpuria-54a07a1
https://angel.co/aprameyar https://angel.co/apurva-salarpuria
Arun Venkatachalam Ashish Gupta

https://www.linkedin.com/in/arunvenk https://www.linkedin.com/in/ashish-gupta-9632571
https://angel.co/arun-venkatachalam https://angel.co/agupta1
Ashvin Chadda Binny Bansal

https://www.linkedin.com/in/ashwin-chadha-a68097a https://www.linkedin.com/in/binnybansal
https://angel.co/ashvin-chadha https://angel.co/binny-bansal
Deepak Shahdadpuri
Deep Kalra
https://www.linkedin.com/in/deepakishahdadpuri
https://www.linkedin.com/in/deepkalra
https://angel.co/deepak-shahdadpuri
Ganesh Natarajan Girish Mathrubootham

https://www.linkedin.com/in/ganeshnatarajan https://www.linkedin.com/in/girish1
https://angel.co/ganesh-natarajan https://angel.co/mrgirish
54
Indus Khaitan Jitendra Gupta

https://www.linkedin.com/in/khaita https://www.linkedin.com/in/guptajiten
https://angel.co/1ndus https://angel.co/jitendra-gupta-11
Kanwaljit Singh Krishnan Ganesh

https://www.linkedin.com/in/singhkanwaljit https://in.linkedin.com/in/ganeshk
https://angel.co/kanwaljit-singh https://angel.co/krishnan-ganesh
Kunal Bahl Kunal Shah

https://in.linkedin.com/in/kunalbahl https://www.linkedin.com/in/kunalshah1
https://angel.co/kunal-bahl https://angel.co/kshah
Manish Singhal
Madan Padaki
https://in.linkedin.com/in/smanishsinghal
https://www.linkedin.com/in/madanpadaki
https://angel.co/manish-singhal
Mohandas Pai Pallav Nadhani

https://www.linkedin.com/in/mohandaspai https://www.linkedin.com/in/pallavn
https://angel.co/t-v-mohandas-pai https://angel.co/pallav-nadhani
55
Phanindra Sama Rajan Anandan

https://www.linkedin.com/in/phanisama https://www.linkedin.com/in/rajan-anandan-2481b814
https://angel.co/phanindra-sama https://angel.co/rajan-anandan
Ritesh Malik Rohit Bansal

http://in.linkedin.com/pub/dr-ritesh-malik/a/a87/877 https://www.linkedin.com/in/rohitkbansal
https://angel.co/riteshmalik40 https://angel.co/rohit-bansal
Sachin Bansal Samir Bangara

https://www.linkedin.com/in/sachinbansal https://in.linkedin.com/in/samirbangara
https://angel.co/sachinb https://angel.co/samir-bangara
Samir Sood
Sandeep Tandon
https://www.linkedin.com/in/samir-sood-
https://www.linkedin.com/in/satandon
37447a8a
https://angel.co/sandeep-tandon
https://angel.co/samir-sood
Sanjay Mehta Sharad Sharma

https://www.linkedin.com/in/mehta-sanjay https://in.linkedin.com/in/sharadsharma
https://angel.co/sanjay-mehta https://angel.co/sharad-sharma
56
Sunil Kalra Utsav Somani

https://www.linkedin.com/in/sunil-kalra-a129a621 https://in.linkedin.com/in/utsavsomani
https://angel.co/sunil-kalra https://angel.co/utsav-somani
V Balakrishnan Vijay Shekhar Sharma

https://www.linkedin.com/in/venkatraman-balakrishnan-37141817 https://in.linkedin.com/in/vijayshekhar
https://angel.co/v-balakrishnan https://angel.co/vijayshekhar
Zishaan Hayath
https://in.linkedin.com/in/zishaan
https://angel.co/zishaan
57
Director y Section - Co Working Space
91 Springboard Bangalore Alpha Lab

http://91springboard.com/ http://bangalorealphalab.in/
Bangalore Coworking Hub Bombay Connect

http://bangalorecoworkinghub.blogspot.in/ http://bombay-connect.com/
Cobalt BLR CoWork Café

https://cobalt.cobot.me/ http://coworkcafe.in/
CoWorkIndia
CoWork Zone
http://www.coworkindia.com/
https://www.facebook.com/coworkzone.in
Evoma Hatch Station

http://www.evoma.com/home.html http://hatchstation.com/
58
Ikeva Inhwa Business Centre

http://www.ikeva.in/ http://www.inhwabusinesscentre.com/
Investopad Jaaga
http://www.investopad.com/ http://jaaga.in/
Jack Your Startup Moonlighting

http://www.jackyourstartup.com/ http://moonlighting.in/
Our First Office Rent A Desk

http://www.ourfirstoffice.com/ http://www.rentadesk.in/
Smart Spaces Social Offline

https://www.facebook.com/smartspaces.blr http://www.socialoffline.in/
59
Startup Café Startup Warehouse

https://www.facebook.com/TSCBangalore/info http://10000startups.com/startup-warehouse/
Stirring Minds The Playce

http://stirringminds.com/ http://theplayce.in/
The Startup Centre The Studio

http://www.tsctribe.co/coworking/ https://www.facebook.com/coworkingdelhi
The Valley The Works At

http://thevalley.in/ http://theworks.at/
Work-Adda CoWorking Working Company

https://www.facebook.com/workadda http://workingco.in/
The Startup Zone

https://thestartupzone.in
60
Director y Section - Deal Platforms
1Crowd 36Kr
https://www.1crowd.co/ http://36kr.com/
AngelList Applyifi
https://angel.co/ http://www.applyifi.com/
Artha Platform Club ah!

http://www.arthaplatform.com/ http://www.clubah.com/
Enablers F6S
http://enablersinvestment.com/ https://www.f6s.com/
GlobeVestor GREX
https://www.globevestor.com/ https://www.grex.in/
61
Director y Section - Deal Platforms
LetsVenture RueOne Investments

https://letsventure.com/ http://www.rueone.com/
Seedrs StartEZ Technologies

https://www.seedrs.com/ http://startez.co/
62
Director y Section - Seed Funds
50K Ventures
Agnus Capital
Hyderabad
Bengaluru
http://50kventures.com/
Alpha Capital Angel Prime

Mumbai Bangalore
http://alphacapital.in/ http://angelprime.com
Ankur Capital Astarc Ventures

Mumbai Mumbai
http://www.ankurcapital.com/ http://astarcventures.com
Axilor Ventures Blume Ventures

Bangalore Mumbai
http://axilor.com/ http://www.blumeventures.com
CapAleph Capier Investments

Bangalore Bangalore
http://capaleph.com http://capierinvestments.com
63
Endiya Partners EVC Ventures

Hyderabad Haryana
http://www.endiya.com/ http://evc.ventures
Fireside Ventures Florintree

Bangalore Mumbai
https://www.firesideventures.com http://www.florintree.com
Gray Matters Capital GSK Ventures

Bangalore Mumbai
http://www.graymatterscap.com/ http://www.india-pharma.gsk.com
GVFL Ideaspring
Ahmedabad Bangalore
http://www.gvfl.com http://www.ideaspringcapital.com
Idein Ventures India Internet Fund

Mumbai Delhi
http://ideinventures.com/ http://www.indiainternetfund.com/
64
India Quotient IvyCap Ventures

Ahmedabad Mumbai
http://www.indiaquotient.in http://ivycapventures.com
JSW Ventures Jungle Ventures

Mumbai Singapore
http://www.jsw.in/ventures http://www.jungle-ventures.com/
Kae Capital KellyGama

Mumbai Ahmedabad
http://www.kae-capital.com/ http://kellygamma.com
Konglo Ventures Kstart

Cochin Bangalore
http://kongloventures.com http://kstart.in
Lightbox Ventures M&S Partners

Mumbai Mauritius
http://lightbox.vc/ http://www.ms-capitalpartners.com/en/index.html
65
MCube Capital Navam Capital

Gurgaon Kolkata
http://mcubecapital.com/ http://www.navamcapital.com
Next Orbit Ventures Oliphans Capital

Mumbai Mumbai
http://nextorbitventures.com http://oliphans.com/
Orios VP Outbox Ventures

Mumbai Delhi
http://oriosvp.com/ http://www.outbox.ventures/
Peesh VC
Powerhouse Ventures
Delhi
http://powerhouseventures.com
http://www.peeshvc.com/
Pravega Ventures Prime Venture Partners

Delhi Bangalore
http://www.pravegavc.com/ http://primevp.in/
66
Purvi Capital
Rainmaker Ventures
TEXAS
Mumbai
http://purvicapital.com/
Rebright Partners Saha Fund

Bangalore Bangalore
http://rebrightpartners.com www.sahafund.com/
Scale Ventures Sixth Sense Ventures

California Mumbai
http://www.scalevp.com/ http://www.sixth-sense.in
Snow Leopard Technology Ventures Sol Primero

Pune Bangalore
http://www.snowleopardtechventures.com http://www.solprimero.com
StartupXseed Ventures Unicorn India Ventures

Bangalore Mumbai
http://www.startupxseed.in/ http://www.unicornivc.com
67
Uniqorn Ventures Unitus Seed Fund

Mumbai Bangalore
http://www.uniqornventures.com http://usf.vc/
Ventureast WaterBridge Ventures

Chennai New Delhi
http://www.ventureast.net http://waterbridgeventures.in
White Unicorn Ventures YourNest

Mumbai Gurgaon
http://whiteunicornventures.com/ http://www.yournest.in
YouWeCan Ventures
Gurgaon
http://www.youwecanventures.com/
68
Director y Section - Early Stage Investors
3ONE4 Capital Aarin Capital

Bangalore Bangalore
http://3one4capital.com http://www.aarincapital.com/
Aavishkaar Accel India

Mumbai Bangalore
http://www.aavishkaar.in http://www.accel.com
AdvantEdge Partners
Agnus Capital
Noida
Bengaluru
http://advantedge.vc
Alpha Capital Ankur Capital

Mumbai Mumbai
http://alphacapital.in/ http://www.ankurcapital.com/
Artiman Ventures Astarc Ventures

Bangalore Mumbai
http://www.artiman.com http://astarcventures.com
69
Axilor Ventures Beenos Partners

Bangalore Tokyo
http://axilor.com/ http://beenos.com/
Bertelsmann India Investments Bessemer

Noida Bangalore
http://www.biifund.com http://www.bvp.com
Blume Ventures Bravia Capital

Mumbai Mumbai
http://www.blumeventures.com http://www.braviacapital.com/
Capier Investments
Burman Family Office
Bangalore
Delhi
http://capierinvestments.com
Carpediem Capital Carpediem Capital Partners

Mumbai Mumbai
http://www.carpediem-capital.com http://www.carpediem-capital.com/
70
Catamaran Ventures
Cocoon Ventures
Bangalore
http://www.cocoonventure.com
http://www.catamaranventures.com/
Currae Healthtech Fund Digital Garage

Mumbai Tokyo
http://www.curraehealthtech.com http://www.garage.co.jp/en
Earlsfield Capital Elevar Equity

London Bangalore
http://earlsfieldcapital.com/ http://www.elevarequity.com
Endiya Partners EVC Ventures

Hyderabad Haryana
http://www.endiya.com/ http://evc.ventures/
Exfinity Fund Faering Capital

Bangalore Mumbai
http://www.exfinityventures.com/ http://www.faeringcapital.com
71
Gray Ghost Ventures Gray Matters Capital

Chennai Bangalore
http://www.grayghostventures.com http://www.graymatterscap.com/
GREE Ventures
Green Visor Capital
Tokyo
http://greenvisorcapital.com
http://www.greeventures.com/
Helion Ventures Ideaspring

Bangalore Bangalore
http://www.helionvc.com http://www.ideaspringcapital.com
Idein Ventures IDG Ventures India

Mumbai Bangalore, KA
http://ideinventures.com/ http://www.idgvcindia.com
IIML
IIFL VC
Bandra (East), Mumbai
Mumbai
http://www.ilfsinvestmentmanagers.com
72
Incubate Fund India Financial Inclusion Fund

Mumbai Hyderabad
http://incubatefund.com/en http://www.caspian.in/
India Internet Fund India Quotient

Delhi Ahmedabad
http://www.indiainternetfund.com/ http://www.indiaquotient.in
Infosys Innovation Fund Infuse Ventures

Bangalore Ahmedabad
https://www.infosys.com http://www.infuseventures.in
Inventus Capital Partners IvyCap Ventures

Bangalore Mumbai
http://www.inventuscap.com http://ivycapventures.com
JSW Ventures Jungle Ventures

Mumbai Singapore
http://www.jsw.in/groups/jsw-ventures http://www.jungle-ventures.com/
73
Kae Capital Kaizen PE

Mumbai Mumbai
http://www.kae-capital.com/ http://www.kaizenpe.com/
Kalaari Capital Kitara Capital

Bangalore Mumbai
http://www.kalaaricapital.com http://www.kitaracapital.com
KITVEN Lightbox
Bangalore Mumbai
http://www.kitven.com http://lightbox.vc/
Lightspeed Ventures Lumis Partners

Delhi Gurgaon
http://www.lightspeedvp.com http://www.lumispartners.com
M&S Partners Mandala Capital Fund

Mauritius Mumbai
http://www.ms-capitalpartners.com/en/index.html http://mandala-capital.com
74
Mantra Ventures Matrix Partners India

Pune Mumbai
http://mantraventures.in http://www.matrixpartners.com
Maverick Capital Mayfield

Dallas, TX Mumbai
http://www.maverickcapital.com/ http://www.mayfield.com
MCube Capital NEA

Gurgaon Mumbai
http://mcubecapital.com/ http://www.nea.com/
Nexus Venture Partners Nirvana Ventures

Mumbai Mumbai
http://www.nexusvp.com http://www.nirvanaventures.in/
Nokia Growth Partners Norwest

Gurgaon Mumbai
http://www.nokiagrowthpartners.com http://www.nvp.com
75
Now Capital Oliphans Capital

New Jersey Mumbai
http://www.nowcapital.com/ http://oliphans.com/
Omidyar Network Omnivore Partners

Mumbai Mumbai
http://www.omidyar.com http://www.omnivore.vc
Orios VP Outbox Ventures

Mumbai Delhi
http://oriosvp.com/ http://www.outbox.ventures/
Paragon Partners Parampara Captial

Mumbai Hyderabad
http://paragonpartners.in/ http://paramparas.com/
Peepul Capital Peesh VC

Chennai Delhi
http://www.peepulcapital.com http://www.peeshvc.com/
76
Pi Ventures Powerhouse Ventures

Mumbai Mumbai
http://www.piventures.in http://powerhouseventures.com
Pravega Ventures Prime Venture Partners

Delhi Bangalore
http://www.pravegavc.com/ http://primevp.in/
Purvi Capital Qualcomm Ventures

TEXAS Bangalore
http://purvicapital.com/ http://www.qualcomm.com/ventures/
Quarizon RAAY Global Investments

New Delhi Mumbai
http://www.quarizon.com www.raayinvestments.com
Rajasthan VC Ratan Tata

Jaipur Mumbai
http://www.rvcf.org
77
RB Investments Rebright Partners

Singapore Bangalore
http://www.rbworld.com/ http://rebrightpartners.com
Reliance Capital Reliance Venture

Mumbai Mumbai
http://www.reliancecapital.co.in http://www.relianceventure.com
Ribbit Capital
Rianta Capital
California
London
http://ribbitcap.com
Rocket Internet rocketship.vc

Gurgaon Delhi
https://www.rocket-internet.com/ https://www.rocketship.vc
Saama Capital Sabre Capital

Bangalore Mumbai
http://www.saamacapital.vc http://www.sabre-partners.com/
78
Saha Fund SAIF

Bangalore Gurgaon
www.sahafund.com/ http://www.saifpartners.com
Sands Capital Sixth Sense Ventures

Arlington Mumbai
http://sandscapital.com/ http://www.sixth-sense.in/
Snow Leopard Technology Ventures Sol Primero

Pune Bangalore
http://www.snowleopardtechventures.com/ http://www.solprimero.com
Solidarity StartupXseed Ventures

Mumbai Bangalore
http://www.solidarity.in/ http://www.startupxseed.in
Stellaris Venture Partners Tano Capital

Bangalore Mumbai
http://stellarisvp.com http://www.tanocapital.com
79
Tata Capital Innovations Fund The HR Fund

Mumbai Gurgaon
http://www.tatacapital.com/ http://www.thehrfund.com
Tiger Global Trans Continental VC

New York Mumbai
http://tigerglobal.com http://transconcapital.com/
TVS Capital Unicorn India Ventures

Chennai Mumbai
http://www.tvscapital.in http://www.unicornivc.com
Unilazer Ventures Uniqorn Ventures

Mumbai Mumbai
http://www.unilazer.com http://www.uniqornventures.com
Ventureast
Valiant Capital
Chennai
San Francisco
http://www.ventureast.net
80
Ventureworks India Vertex

Noida Bangalore
https://www.ventureworks.in http://www.vertexmgt.com
VH Capital White Unicorn Ventures

New Delhi Mumbai
http://venturehighway.vc http://whiteunicornventures.com/
YourNest YouWeCan Ventures

Gurgaon Gurgaon
http://www.yournest.in http://www.youwecanventures.com/
Zodius Capital
Mumbai
http://www.zodius.com
81
Director y Section - Social VC Investors
Aavishkaar Accion International

Mumbai Bangalore
91 22 4200 5757 91 80 6723 6400
http://www.aavishkaar.in http://www.accion.org
Acumen Fund Ankur Capital

Mumbai Mumbai
91 22 6740 1500 91 22 2372 5515
http://www.acumenfund.org http://www.ankurcapital.com/
Asha Impact
Aspada Investments
Delhi
Bangalore
91 11 6566 3193
http://www.aspada.com/
http://ashaimpact.com/
Belgian Investment Company for

Bamboo Finance
Developing Countries
Singapore
Brussels
65 63610899
32 (0)2 778 99 99
http://www.bamboofinance.com
http://www.bio-invest.be/
Calvert Foundation
BlueOrchard
800-248-0337
http://www.blueorchard.com
http://www.calvertfoundation.org/
82
Capricorn Contrarian Drishti

Palo Alto Mumbai
1 650 331 8800 022 6617 0902
http://www.capricornllc.com/ http://www.contrariandrishti.com
Creation Investments Dia Vikas Capital

Chicago Gurgaon
001 312 784 3980 91 12 4452 9500
http://creationinvestments.com/ http://www.dia-vikas.org
Elevar Equity Ennovent

Bangalore Delhi
91 80 4335 6666 91 11 4385 1999
http://www.elevarequity.com http://www.ennovent.com/
GAWA Microfinance Fund Gray Ghost Ventures

Madrid Chennai
34 915760537 91 98410 71043
http://www.amberscocapital.com http://www.grayghostventures.com
IAN - Impact
Gray Matters Capital
New Delhi
Bangalore
91 11 , 4075 5713
http://www.graymatterscap.com/
http://www.indianangelnetwork.com
83
IFMR Trust Incofin

Chennai Chennai
91 44 6668 7000 44 26416624
http://www.ifmr.co.in http://www.incofin.be
Infuse Ventures
Insitor Fund
Ahmedabad
New Delhi
91 79 6632 4201 / 4234 / 4233
http://www.insitormanagement.com/
http://www.infuseventures.in
Intellecap Impact Investment Network

Khosla Impact
(I3N)
California
Mumbai
650 376 8500
91 22 6195 2700
http://www.khoslaimpact.com
http://intellecap.com
LGT Venture Philanthropy Lok Capital

Zurich Delhi
41 44 256 8110 91 11 3090 0100
http://www.lgtvp.com http://www.lokcapital.com
Menterra Impact Fund Menterra Social Impact Fund

Bangalore Bangalore
91-80-4163 1523 91 80 4163 1523
http://www.menterra.com http://www.menterra.com/
84
Michael & Susan Dell Foundation Norfund

New Delhi Oslo
91 11 4966 6300 47 22 01 93 93
http://www.msdf.org https://www.norfund.no
Norwegian Microfinance Initiative Oikocredit

Oslo Netherlands
47 22 36 22 40 31 33 422 40 40
http://www.nmimicro.no www.oikocredit.coop
Omidyar Network Omnivore Partners

Mumbai Mumbai
T: 91 22 6118 7300 91 22 2519 4490
www.omidyar.com www.omnivore.vc
responsAbility
Rianta Capital
Mumbai
London
91 22 3077 0300
91 44 20 7016 4300
http://www.responsability.com
Unitus Impact Unitus Seed Fund

San Francisco Bangalore
415 829 2473 91 80 6723 6400
http://unitusimpact.com/ http://usf.vc/
85
Upaya Social Ventures Villgro

Washington Chennai
1 206 788 5672 91-44-66630400
http://www.upayasv.com/ http://www.villgro.org/
86
Director y Section - Healthcare Funds
GSK Ventures
Cipla New Ventures
Chennai
Mumbai
91 44 4957 2293
91 22 23082891
http://www.gsk.com/
Healthquad
HBM Healthcare Investments
New Delhi
http://www.hbmhealthcare.com/en
http://healthquad.in
India Life Sciences Fund OrbiMed

Hyderabad Mumbai
91 40 2354 1305 91 22 6140 3000
http://www.evolvence.com/ http://www.orbimed.com
Quadria India RoundGlass Partners

New Delhi Punjab
91 11 4953 9900 91-11 39585644
https://www.quadriacapital.com http://round.glass
Sabre Capital Somerset Indus Capital Partners

Mumbai Mumbai
91 22 6617 8800 91 22 6610 1199
http://sabre-partners.com/ http://www.somersetinduscap.com/index.htm
Tata Capital Healthcare Fund

Mumbai
91 22 6606 9000
https://www.tatacapital.com/web/private_equity/funds.htm
87
Director y Section - Active SME Investors
Aquarius Bessemer
Bangalore Bangalore
91 80 4112 4880 80 30829000
www.aquarius.com.sg www.bvp.com
BanyanTree Finance(Banyan Tree Growth

Gaja Capital
Capital)
Mumbai
Mumbai
91 22 2421-2280
91 22 6623 5555
www.gajacapital.com
www.banyantreefinance.com
IFC Lighthouse Fund

Mumbai Mumbai
91 22 4230 2400 91 22 4204 1000
www.ifc.org www.lhfunds.com
WestBridge
Paragon Partners
Bangalore
Mumbai
91 80 49070900
http://www.paragonpartners.in
http://www.westbridgecap.com
NEA GVFL
Mumbai Ahmedabad
91-22-4223 5600 91-79-4021 3900, 2658 9985
www.nea.com http://www.gvfl.com
SIDBI VC
Mumbai
91 - 22 - 3947 3200
http://www.sidbiventure.co.in
88
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Table Of Contents

Landscape Of Venture Capital Investors In India 4

Sample Term Sheet For Early Stage Investments 9

Negotiating Term Sheets - When to say “Yes!” & 18

Investor Value - add - the Myth and Realty 27

Regulation of P2P Platforms in India 31

Early Stage Investors 69

Active SME Investors 88

Typical Investment Accelerators Incubators

Typical Investment Seed Blume Ventures

VC Funds Exfinity Fund

Ventureast is one of the longest standing venture Some marquee investments:

With a team of about 20 investment professionals

Chennai: Phone: 040-6551 0491

Stakeboat Capital LLP is a value oriented,

3. Investment a) The Company is desirous of raising funds through

b) The Investor is desirous of subscribing to 100 (One

a) Sale of assets except in the ordinary course of business.

m) Setting up of salary and benefits of any employee with

Should any shareholder not subscribe to its portion in the

The conversion price of the Investor CPs will be subject to a

11. Non-Compete Promoters jointly and severally agree not to directly or

18. Binding This Term Sheet is subject to the execution of Definitive

For ABC Private Limited

2. BOARD OF DIRECTORS’ RIGHTS

5. EXIT RIGHTS AND EVENT OF DEFAULT

7. CESSATION OF RIGHTS AND OBLIGATIONS

Mumbai Delhi Kolkata Chennai Bangalore

Investors are driven solely by profitable exits

More funds- better investor

Investor rights could interfere the running of the business

Dated April 28, 2017

II. Registration of P2P Platforms

III. Permitted and Restricted Activities

VI. Operational Guidelines

VII. Appointment of Directors

VIII. Escrow Account

IX. RBI Approval for Change in Shareholding and Directors

X. Power to Grant Exemptions

Abhiyan, IIM Lucknow

AIP, ICRISAT CIE, IIIT Hyderabad

Amity Innovation Incubator CIIE, IIM Ahmedabad

Amrita TBI Composites Technology Park

BEC STEP DKTE TBI

Ekta Incubation Centre

Faraday Bicentanary Sciente Park Global Incubation Services

i2India IAN Incubator

icreate IIITB Innovation Centre

IKP Knowledge Park InnAccel

JSS STEP, JSSATE

Khosla Labs Kerala Startup Mission

MCIIE, IIT Varanasi KIIT TBI

NDBI, NIID NDRI

NSRCEL, IIM Bangalore NITK-STEP

Periyar TBI PayPal Start Tank

RTBI, IIT Madras PSG STEP

Shriram Institute for Industrial Research SID, IISc Bangalore

SIIC, IIT Kanpur SINE, IIT Bombay

SJCE STEP SRM Incubation and Entrepreneurship centre

Startup Oasis Startup Village

STEP IIT Roorkee STEP, IIT Kharagpur

STEP, Thapar University Tagore Center for Green TBI

TBI, Anna University TBI, Bannari Amman Institute of Technology