A Venture Capital Playbook More than Time
Venture capital is possibly the most nicely-identified form of equity investment However, it’s also one of the toughest to land. Of these qualities, funds are most interested in ventures with exceptionally higher development potential, as only such opportunities are most likely capable of supplying monetary returns and a successful exit within the expected time frame (typically three-7 years) that venture capitalists count on.
Therefore, if the shares of a corporate entity were transmitted to an FI on account of operation of a statute, and had been not acquired of its personal volition, such entities could be treated as a Joint Venture and the shares held therein classified and valued accordingly, as per the extant RBI norms.
These are commonly non-binding and commit the parties only to very good faith attempts to comprehensive the transaction on specified terms, but may also contain some procedural promises of restricted (30-60 day) duration like confidentiality, exclusivity on the portion of the business (i.e. the corporation will not seek funding from other sources), and stand-still provisions (e.g. the company will not undertake any major company adjustments or enter agreements that would make the transaction infeasible).
Venture capitalists are commonly very selective in deciding what to invest in as a rule of thumb, a fund may perhaps invest in as handful of as one particular in four hundred possibilities presented to it. Funds are most interested in ventures with exceptionally high growth possible, as only such opportunities are most likely capable of providing the economic returns … READ MORE ...