INTELLIGENCE

VENTURE

India's Largest Deal Information Bank Since '02

Handbook on Venture Capital

An Entrepreneur's guide to Early Stage Funding

January 2012

INTELLIGENCE

VENTURE

Handbook on Venture Capital

Table of Contents
Executive Summary Venture capital investor landscape in India How entrepreneurs should engage with angel investor groups (before and after funding) Negotiating Term Sheets - Legal Issues Right law firm to work with Entrepreneurs Perspective Can Capital ever be a Curse? - by Sanjay Anandaram Listing of Early Stage Investors Listing of Social Venture Investors About Venture Intelligence 3 4

VNS Legal
Advocates

13 17 19

20 39

41

INTELLIGENCE

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Handbook on Venture Capital

Executive Summary

And How to Go About It

Which (Investor) Doors to Knock?

The handbook begins with Venture Intelligence's overview of the venture capital investor landscape in India, with a special focus on providing a map of the various types of investors. This is followed by an article by members of Mumbai Angels - the pioneering angel investor group that other regional angel groups in the country have adopted as the benchmark and template on how entrepreneurs should engage with angel investor groups (before and after funding). One of the key developments in early stage funding in recent years is that it has become a largely disintermediated segment with most of the investment banking advisory firms preferring to work only larger sized investments. Consequently, the role of the legal advisors has come to the fore. In his article titled "Negotiating Term Sheets - Legal Issues", VN Shiva Shankar of VNS Legal outlines the key issues that entrepreneurs should look out for when entering into formal negotiation for equity investments. But how does one pick the right law firm to work with? Bhavana Alexander, Sharanya G Ranga and Kavitha Vijay of Universal Legal lay out the parameters in their article. The Entrepreneurs' Perspective section relates the experience of several entrepreneurs who have raised and benefited from this kind of capital. Given that capital in the early stages is becoming more plentiful, should entrepreneurs jump in and raise money when the going is good. Sanjay Anandaram of Jumpstartup who has been an entrepreneur as well as an angel and VC investor provides a cautionary tale in his article Can Capital ever be a Curse?
We hope you find the contents of this Handbook useful. Do send us any feedback that might help us improve.

The great news for entrepreneurs seeking external equity capital in today's India is that there are several pockets of such investors (pools of capital in investor jargon) that are actively scouting for investment opportunities. At Venture Intelligence, India's first and leading research firm tracking Private Equity/Venture Capital activity, we have been fascinated to observe how the early stage investing ecosystem has filled out rapidly over the last few years. The entry of several angel networks/groups, seed and early stage focused funds that - unlike in the past - have ignored stock market gyrations and continued to invest actively, has been very encouraging to observe. While the availability of more investors to approach is no doubt a good thing, given how intense and time consuming any capital raising process is, we felt a guide that can help identify the right doors to knock based on the nature of the startup, the amount of funding required, etc. along with inputs (from investing industry and advisory practitioners) on the do's and don'ts of the process would serve entrepreneurs well.

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Handbook on Venture Capital

Landscape of Venture Capital Investors in India

Typical Investment

< Rs.50 Lakhs

Incubators

IIM-A NCL Pune NSRCEL SINE

Typical Investment

Rs.50 Lakhs - 2 Crores

Angel Networks

Chennai Angels Hyderabad Angels Indian Angel Network Mumbai Angels

Typical Investment

Rs.50 Lakhs - 2 Crores

Seed Level Funds

Blume Ventures Nexus Ventures Ojas Ventures Seedfund Ventureast-Tenet

Typical Investment

Rs.2 - 10 Crores

VC Funds Early Stage

Accel India Footprint Ventures IDG Ventures India Inventus Capital Seedfund Sequoia Capital India

INTELLIGENCE

VENTURE

Handbook on Venture Capital

Landscape of Venture Capital Investors in India

Typical Investment

Rs.10 - 25 Crores

VC Funds Growth Stage

Canaan Partners Helion Ventures IndoUS Ventures Nexus Ventures SAIF Sequoia Capital India

Typical Investment

Rs.25 - 100 Crores

PE Investors SME Focused

Aquarius Aureos Avigo Capital Bessemer Gaja Capital Headland Capital IFC IFCI Ventures Mayfield NEA Zephyr Peacock

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Handbook on Venture Capital

How entrepreneurs should engage with angel investor groups

Dealing with Angels Before and After Funding

What are angel investors looking for?
1. Excellent team: Educated in top institutes with passion and relevant work experience 2. Great Idea/Concept: Present a clear value proposition and connect with investors. a. Value Proposition: What problem is being solved? b. Business Model /Revenue channels /Target customers 3. Market opportunity: Total addressable market (TAM) should be large enough. The competitive landscape should not be much cluttered. a. Clear differentiators / USP/Entry Barriers b. Industry segment : high growth potential with capital efficient or low capex (for example IT, ecommerce, Mobile VAS, education, health care, etc) c. Growth drivers should be robust. 4.Financial Feasibility a. High returns, Angel investments as an asset class are incredibly risky. The most sophisticated angels make at least ten investments in order to make a return on their investment. In the United States out of ten investments with a 5-7 year time frame, statistically 5 fail outright causing angels to lose their entire investment, 2 give even returns, 2 give 2-3x returns, and 1 will give 10x+ returns b. High margins , scalable business c. Low capital expenditure d. Viable exit options: While entrepreneurs may see their company as a lifelong career, angel investors are looking for a return on their investment through VC investment, acquisition, IPO, management buyout, etc.

India the land of opportunities, which is growing at over 8% Y-O-Y offers great entrepreneurial land scape. India has been attracting big time investment from VC / PE, it is slow on early stage investments. Thanks to recent Angel investment phenomenon, the start-ups now can look for start-up capital for their venture. This series will help highlighting some finer points on Angel Investment and how to benefit from Angels.

Who are angel investors and what are angel groups?

Angel investors are usually High net-worth individuals (HNIs) who invest in early stage companies in exchange for equity stakes in the business. Angels usually fall in the bracket of corporate leaders, business professionals and successful entrepreneurs. Angels bring smart money to the table (help in mentoring and network building as well) Angel groups are formed when individual angels join together to collectively evaluate and invest in entrepreneurial ventures, pooling their capital to make larger investments. Individual Angels
Small Network and deal flow Concentrated exposure in area of expertise Limited resources for due diligence, mentoring, monitoring. No negotiation leverage to set ideal valuations, terms and conditions.

Key things to remember when looking for angel funding

1. Transparency: Complete transparency is paramount; entrepreneurs must only provide potential investors with fully accurate and comprehensive information about themselves and their plans. While investing, angels will do due diligence; any incorrect information will result in damage to their credibility. 2. Clean structure: The shareholding structure should be clear and the employee hierarchy clearly mapped out for all foreseeable stages of the company.

Angel Groups
Large network and deal flow Investments are across various sectors. Share due diligence, employ combined capabilities and network to rapidly grow companies in which they have invested. Invest higher amount and negotiate as a group.

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Handbook on Venture Capital

How entrepreneurs should engage with angel investor groups (before and after funding)

3. Valuation: Value creation is priority, valuation will follow, dont get stuck on it. 4. Listen and learn: Throughout the process entrepreneurs must listen, take advice, and not get defensive. Harvard studies have shown that mentored companies are much more likely to succeed; advice from angel investors will help entrepreneurs avoid many mistakes. 5. Apply through referral: Given the high volume of deal flow angels encounter and the high-risk nature of the asset class, angels are much more likely to invest in start-ups recommended by people they know and trust. It is important to network in your community and apply to angel groups with a referral.

2. Good Traction: The Company has existing customers or potential customers with purchase orders. 3. Balanced team: Team and advisors in place.

After funding how can entrepreneurs maintain involvement from angels?

1. Client Acquisition: Share your pipeline of prospective customers and target customers. Angels can help you opening doors at right places 2. Frequent updates: Keep the investors updated about key things in the company (financials, key hires, Business development, Business plan, and strategy).Angels are your sounding board, they can alarm you if they see any red flags. 3. Engage with the Investor director on board: Some Angels will join the board of directors and have contractual information rights to safeguard their investment and to help the company grow. 4. Share Challenges and risks: Entrepreneurs should share their challenges and concerns with investors, so a collaborative solution can be worked out. Also entrepreneurs should seek help from angels when in trouble. 5. Metric driven reporting: Entrepreneurs should use appropriate metrics when reporting company progress to angel investors. Metrics should be chosen that measure the progress in the current stage of growth, are appropriate for the industry, and align with the information the angels need to help the entrepreneur reach milestones. 6. Implement suggested changes: Angels are very sharp and come with years of experience, take their advice seriously. Not paying heed to their suggestions will result in reduced suggestion from them. 7. Hold Annual investors meet. 8. Establish a solid working relationship with the main contact as that will set the tenor of interactions with all investors.

How can angels help?

1. Mentoring and strategy formulation: Angels use their experience and mentor their portfolio companies. Also help in strategic planning. 2. Key Hires: Angels Help in recruiting advisors or a board of industry experts who can open doors for and contribute to the project. 3. Word of Mouth: Angels become excellent Brand ambassadors for the company. 4. Lend credibility: Investment by an angel group validates the start-up and helps them gain credibility. 5. Bring Professionalism: Also when there is external money pumped in the company, the business goes to the next level as the entrepreneur is answerable to more people. 6. Network and connection building: Angels act as ambassadors for their portfolio companies, introducing entrepreneurs to potential customers and opening up doors to other investors for subsequent funding rounds. 7. Raise next round of funding: Angels help entrepreneurs raise next round of funding or mergers/acquisitions.

When to engage with angel investors?

How will angels help with subsequent rounds of financing and exits?
1. Good relationship with VCs: Angels are an important connection to follow on investments and angel groups typically maintain tight relationships with VCs. 2. Financing experience: Entrepreneurs should look to angels to advise them on the best financing to obtain, whether theyre seeking debt, debt/equity, or equity. 3. Strategic Vision: Its important to have a strategic vision with a road map to the exit and milestones built in along the way. This plan will evolve to match the market dynamics as they change over the life of the company.

1. Product/Prototype ready: Product development is finished

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Handbook on Venture Capital

How entrepreneurs should engage with angel investor groups (before and after funding)

Firm Profile

Prashant
Mumbai Angels (www.mumbaiangels.com), started in 2006 is a leading Angel network in India with over 150 members and 35 portfolio companies. The Mumbai Angels invests USD 100,000 to 500,000 and provides a unique platform to start up and very early stage companies by bringing them face to face with successful entrepreneurs, professionals and executives who are interested in and have the funds available to invest in start-up companies. Many members of Mumbai Angels have prior Silicon Valley experience. In addition to the capital of its members, the Mumbai Angels provides access to high quality mentoring, vast networks in India and abroad and inputs on strategy as well as execution. Mumbai Angels

Anil Joshi

Ashpi

provides its portfolio companies with a level of assistance that surpasses their highest expectations. Mumbai Angels network of relationships and their ability to leverage those relationships on behalf of their portfolio companies is unparalleled. Mumbai Angles members and their organisations have come to represent the ideal business partner for entrepreneurs who wish to start and grow a new company. Mumbai Angels portfolio companies are recognized as "best in class" leaders within their respective industries. Entrepreneurs can apply online to Mumbai Angels or can write to contact@mumbaiangels.com

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Handbook on Venture Capital

Legal Issues

Legal issues in negotiating term sheets

V N Shiva Shankar, VNS Legal, Advocates
1.Nature of the Term Sheet whether binding or not It is important that the Parties understand whether the Term Sheet is a binding Term Sheet or not. Mere execution of a Term Sheet is no guarantee of the actual investment taking place. Normally the Investor would be willing to take the investment decision only post due diligence. However, it should be borne in mind that some clauses of a non-binding Term Sheet may still be binding on the parties such as the exclusivity period & non-disclosure of confidential information. 2.Valuation fixed or variable & adjustment clauses The Term Sheet would need to set out the valuation clearly ideally in the local currency. In some cases, the valuation would be determined at only a later date, based on say, performance at the end of a 3 year period. In such cases, the stake / percentage holding of the Investor would get adjusted based on the valuation so determined. Where the valuation would be determined based on performance matrices, it is advisable to clearly set out the performance parameters which the Parties agree upon and how the same would be determined. If it is the intention that an external agency, such as the statutory auditors, provide the confirmation for the achievement or non achievement of such parameters, the same should also be clearly specified. 3.Investment quantum fixed or variable timing issues The Promoters would draw up their business plan based on the actual investment coming in & the timeframe when it comes in. Hence, the Term Sheet should also clearly specify whether the total investment amount is a fixed amount or a variable amount and also whether would be brought in as a single tranche or whether it would be brought in over a period of time. If the investment amount tranches are dependent on fulfillment of certain events, the same would have to be specified. 4.Instrument being issued The Term Sheet would specify the instrument to be issued to the Investor for the investment being made. Apart from the normal equity shares with voting rights which are issued, the Parties could issue other instruments based on their specific requirements. Some examples are: A. Equity Shares with differential rights these shares would either carry differential voting rights or differential dividend rights. These would be issued in cases where the economic benefit to the Investor would be different from the actual voting rights, thereby addressing the control aspect / concern for the Promoters as well. B. Convertible Instruments (Preference Shares or Convertible Debentures) where these instruments would get converted into Equity Shares at a later date. The conversion can either be based on a fixed rate or based on a formula taking into account the future performance. These are used in cases the valuation would be

Background
The past decade has seen a significant amount of VC/PE investments taking place in Indian companies. The trigger for this would apparently be the growth exhibited by Indian companies and the specialized skills which they enjoy in certain sectors. These VC/PE investments have taken place across sectors and are a combination of both domestic as well as overseas funds. The key element for a VC/PE transaction would be the Term Sheet which essentially refers to a document where the ground rules are laid down. The Term Sheet is essentially an expression of interest by both parties in relation to the proposed transaction and sets out their broad understanding and roles & responsibilities therein. There are several crucial points in the Term Sheet on which the Promoter as well as the Investor has to exercise caution as these could have a bearing on the overall transaction, including on the functioning of the Company as these are essentially long term relationships. Significance of & key issues in negotiating a term sheet Though the contents & issues in a Term Sheet would vary based on the type of transaction, we have tried to set out herein some key issues which would be of significant importance to the parties involved in most transactions. As these need to be negotiated & decided upfront, it is necessary for both Parties to fully understand the implications of these clauses.

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Handbook on Venture Capital

Legal Issues - Legal issues in negotiating term sheets

determined at a later date to avoid dilution immediately. In the case of convertible debentures, a coupon could also be attached to it so that the holder could be entitled to interest during the period. C. Optionally convertible instruments / redeemable instruments these are essentially instruments which are quasi debt / quasi equity. The Investor would have the option whether to seek redemption or opt for conversion. Currently, such instruments cannot be issued to foreign investors. 5. Conditions Precedent Another key issue to be addressed in the Term Sheet are the Conditions Precedent (ie) the conditions which are required to be fulfilled / complied with by the Promoter, before the Investor makes the investment. While some of these may be identified at the Term Sheet stage itself, some of these issues may be identified only post due diligence. These would typically include obtaining necessary consents / approvals for the investment, addressing past noncompliances etc. Any conditions which are very onerous or time consuming may need to be suitably addressed by both Parties. 6. Board seat The Term Sheet would also normally specify the right of the Investor to nominate directors on the Board of the Company. Though this may not always be in proportion to the shareholding of the Investor, it is important for both Parties to agree upon the number of such nominee directors and also whether their expenses are required to be met by the Company. 7. Use of proceeds / business plan If the intention of the Parties is that the funding should be used for certain identified purposes, then, the same should be clearly spelt out. As deviations would require consent from the Investor, the Promoters may wish to ensure that there is no restriction on use of funds for stated purposes. 8. Affirmative rights One of the most significant rights which an Investor would seek are the Affirmative Rights where certain matters (normally termed as Reserved Matters) need to be approved by the Investor before it can be implemented. Hence, this usually serves as a veto right available to the Investor which needs to be used judicially. The challenge here would be to strike a balance between the investment risk for the Investor and the flexibility required for the Promoter to carry on the business. Hence, the list of Reserved Matters requiring affirmative vote of the Investor need to be discussed & agreed upon. Wherever threshold levels would apply, the same would also need to be set out. Normally these would include matters such as A. Key managerial hires & compensation; B. Finalising annual budgets / business plans and changes thereon; C. Issue of fresh shares, further dilutions; D. Borrowings; E. Changes in business lines; F. Adoption of accounts; G. Changes in memorandum & articles;

H. Scheme of mergers / reorganization; I. Liquidation / winding up / dissolution etc In some cases, these Affirmative Rights would also undergo changes based on changes in Company performance / reduction in Investors shareholding etc. It is advisable that such changes also be set out clearly in the Term Sheet. 9. Anti-dilution Another important right sought for by Investors would be the antidilution right. This would essentially stipulate that if the Company issues shares at a lower valuation at a subsequent date, the Investor would need to be compensated. While this may be a justified requirement for the Investor, both Parties would need to deliberate on how this could be achieved whether through a fresh issue or a transfer and also any exceptions to this need to be built in. Practical challenges in implementing this, especially if the Investor is a foreign investor, needs careful deliberation. 10. Liquidation Preference This is again a special right sought for by Investors, especially when investing in early stage companies. Liquidation Preference would mean that at the time of a liquidity event (say a strategic sale, merger, IPO, winding up), the Investor would be entitled to a higher return than the actual percentage of their shareholding. This would essentially seek to balance the risks undertaken by the Investor at the time of the investment. Key issues to be borne in mind would be the nature of liquidity event whether all types would be covered, whether Investor would get the liquidity preference & move out or be entitled to a second round of participation also etc. As this clause would also have practical difficulties in implementation, Parties would need to deal with this carefully. If the intent of the Parties is that this clause should fall away after a period of time or after certain valuation parameters have been achieved for the Company, then, this would need to be specified clearly. 11. Transfer restrictions These are typical in Term Sheets and seek to impose certain restrictions on transfer of shares during the term of the Agreement. The transfer restrictions could take the following forms: A. Sale of shares by Promoters - While most Investors would want to impose a blanket restriction on sale of shares by Promoters, there may be instances when Promoters may want flexibility to sell part of their shares for meeting their liquidity requirements. There may also be a need for the Promoter to be able to pledge their shares for raising loans for the Company or for their personal requirement such as funding for further issuances of capital by the Company. Any sale of shares by Promoters may also require consent of Investor or providing a Right of First Refusal (ROFR) and/or a Tag Along Right to the Investor. In the event of a Tag Along Right being offered to the Investor, it may be clarified as to whether the Tag is a full tag (meaning that the Investor would be able to sell all their shares) or a pro-rata Tag (where the Investor would be able to sell their shares in the same proportion as is being sold by the Promoter). B. Sale of shares by Investor while Investors would want complete flexibility to be able to sell their shares without restrictions, the Promoters would like to ensure certain restrictions are built in. These would typically be providing a ROFR or a Right of First Offer (ROFO) to the Promoters, offering a Tag Along Right, restricting sale to a competitor etc. Again here, a balance needs to be arrived at

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Handbook on Venture Capital

Legal Issues - Legal issues in negotiating term sheets

between the flexibity for the Investor and the protection required for the Promoters. 12. Exit options This is one of the key clauses in the Term Sheet as the Investor would be interested in ensuring that there is a clear exit mechanism spelt out. These would typically take the form of a waterfall mechanism with each condition / option having defined time periods: A. Initial public offering wherein the Promoters would be obliged to undertake an IPO at the valuation approved by the Investor. It may be borne in mind that in the offer documents, the Promoters alone would be required to meet the regulatory requirements of disclosure & confirming to minimum lock up shares; B. Strategic / Third Party Sale where an IPO has not taken place, Investor would expect a strategic sale or a third party sale wherein a new investor would buy out the existing Investor. This could be only in respect of the Investors shares or could extend to the Promoters shares as well. The Investor may also have a Drag Along Right wherein the Investor would be able to sell their shares to a third party and also call upon the Promoters to sell along. This is essentially to ensure that the third party buyer acquires the desired number of shares. Since this cannot be an unconditional right, the Term Sheet would spell out the conditions upon which such right can be exercised and the protection available to the Promoter in such cases. c. Put Option / Buy Back Investors may also wish to impose an obligation on the Promoter to buy out their stake, if an exit does not take place. This could be structured as either a promoter purchase or a Company buy-back. It is important to specify the pricing for such an exit as these would typically arise in a situation where other exit forms have not been possible and hence valuation would be a challenge. 13. Representations & Warranties and Indemnity In the Term Sheet, the Investor would seek certain detailed representations & warranties in relation to the Company and its business operations. An indemnity is also normally insisted upon by the Investor for any past losses / past claims. It is important that the Parties clearly define the exceptions to the Representations & Warranties and also any limitations (such as time period, quantum etc) to the Indemnity claims. 14. Non-Compete Typically, Investors would like to ensure that the Promoters do not set up competing businesses during the term of the Agreement & for a fixed period thereafter. This is essentially to protect the value of their investment. While the legal validity of such non-compete clauses is subject to debate, it is important to atleast set out the understanding between Parties clearly to minimize disputes. Typically, the issues involved here would be the period of non-compete, coverage & scope, territory and parties bound by it. In some cases, this obligation of the Promoter would cease in case of default by the Investor. 15. Deadlock When affirmative rights / veto rights are granted to the Investor, it is possible that certain decisions are unable to be taken leading to a deadlock in the management. This should be differentiated between disputes as these are typically contrary views on a common subject. While there is no common method to deal with cases of

deadlock, the Term Sheet would usually provide for resolutions through negotiations or else an option for one party to buy out the other party. Care must be taken to ensure that a deadlock situation is not created to lead to an exit. 16. Fall away of rights Typically, the special rights granted to an Investor would cease / fall away on certain eventualities. This could either be time based or event based (such as a successful IPO, reduction of Investors shareholding below a certain percentage etc). This should be structured in such a way that the Investor does not lose out on their rights when needed, while at the same time ensuring that the Promoter is not permanently fettered. 17. Validity / Exclusivity / Costs / Break up fees While the Term Sheet is an initial expression of interest, it is important to record the intention of the Parties with regard to the exclusivity period when the Promoter cannot approach any other investor, the costs involved in the transaction process & who would bear it. Some Investors may also seek a break up fee which is payable by the Promoters if they fail to put through a transaction. 18. Arbitration The Term Sheet would need to record the understanding of the Parties on the arbitration mechanism in case of any disputes. While Promoters would have a preference for Indian arbitration, Investors may prefer a neutral venue which also has good arbitration systems & facilities. In all these, it is important for both Parties to be conscious of the time factor and the cost involved in the same.

Conclusion
Though there is no standard term sheet or a one size fits all, most of the clauses which have been outlined above would be relevant in a majority of the term sheets. The key for a successful term sheet negotiation would be a willingness of all Parties to discuss all issues and not have predetermined views on an issue. It has been our experience that clauses / protection are purely issue based and would have to be examined afresh considering the business of the Company and the role expected of the Promoter. A PE investment in a company forming part of a large group would be very different from a PE investment in an early stage company without any track record. After successful negotiations, it is important that the real intent of the Parties is captured in the Term Sheet. This could be aided by use of illustrations / examples for sake of clarity as this would really facilitate the transaction process, including the drafting of the Definitive Agreements. If this process is adopted, the Term Sheet would translate into a meaningful document on which the spirit of the Parties could be relied upon, rather than the letter.

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Handbook on Venture Capital

Legal Issues - Legal issues in negotiating term sheets

About the Author

V.N. Shiva Shankar Founder, VNS Legal, Advocates

V N Shiva Shankar is a lawyer and is the founder of VNS Legal, a corporate law firm, based in Chennai. After completing his graduation in commerce from Vivekananda College in the year 1990, he went on to complete his law from the Madras Law College in the year 1993, securing the Madras University rank in law. Shiva Shankar is also a member of the Institute of Cost & Works Accountants of India and a member of the Institute of Company Secretaries of India since the year 1995. Email ID: shiva@vnslegal.in

Professional Experience
Initially for the first two years, served as Head Legal, Corporate Secretarial & Finance, of a software company based at Chennai specialising in product development. He supervised the pre-IPO placements and successfully handled the IPO of the Company which was listed on the Bombay Stock Exchange. Subsequently, for the next ten years, was heading the Legal, Regulatory & Compliance divisions of a large financial group based in Chennai. Responsible for overall legal compliance and instrumental in structuring of new financial products in tune with regulatory changes. Working across a spectrum of companies involved in different activities ranging from manufacturing, financial services, software, pharmaceutical, logistics, property development etc, Shiva Shankar was involved closely in the various fund raising / joint venture activities of the Group.

Shiva Shankar focuses primarily on transaction support services covering areas of mergers & acquisitions, strategic investments, legal due diligences, sale of businesses and joint ventures. Shiva Shankar also advises a number of companies on capital market regulations such as issue of stock on preferential allotment basis, compliance with the SEBI Takeover Code in corporate restructuring etc.

Seminars / Presentations
Closely associated with the Madras Chamber of Commerce, one of India's oldest Chambers of Commerce, and currently the Chairman of the Financial Sector Committee of the Madras Chamber. Visiting faculty at the Institute of Company Secretaries of India. Frequent speaker at various forum & seminars on corporate laws and foreign exchange. Contributor to articles in leading Professional Journals on corporate laws & foreign exchange.

Present areas of specialization

Presently, Shiva Shankar had formed VNS Legal as a corporate law firm, to provide specialised corporate legal services. VNS Legal provides a wide range of corporate legal services to its clients. He has handled a number of corporate legal assignments such as legal due diligences, transaction support services, documentation drafting / vetting, corporate legal assignments such as open offers, capital market regulations, formulating ESOP schemes etc.

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Handbook on Venture Capital

Right law firm to work with

Picking The Right Law Firm to Work With

Bhavana Alexander, Sharanya G Ranga and Kavitha Vijay
risks and restrictive covenants etc. It is important that your legal counsel is involved at the earliest possible opportunity, preferably prior to/at the time of finalizing the term sheet. Although the term sheet is a non- binding document, it is close to impossible to revise the commercial understanding of the parties at a later point of time without parking the investment sine die. When to involve a law firm?

Pre- due diligence/At the stage of a due diligence

For a private equity investment, it is important that the legal due diligence covers aspects on compliance, the business, the credibility of the business of the company, human resources, consultants and specialists. It would also be beneficial for the company to reinforce its legal team, at the pre-due diligence stage to review and update (or clean-up) the paperwork of the company and ensure the compliance requirements are adhered to, before the due diligence is carried out by the investor on the company. Though the pre-due diligence review is typically not a requirement per se, it is beneficial for the company as it affords the company the opportunity to rectify its compliances as opposed to agreeing to a lengthy disclosure schedule on conditions precedent or a reduced business valuation and ensures an efficient disclosure by the company. It is advisable to have your legal advisor with you on the table for purposes of clarity and convenience at all stages of the transaction. The kind of transaction would determine the scope of the due diligence. As an illustration, an investor contemplating on a business transfer transaction would not be requiring a diligence on the maintenance of statutory registers or books of minutes or even filings with the Registrar of Companies of the company to a large extent. On the contrary the diligence would be business- centric.

Private Equity whether venture capital or a leveraged buyout or a plain vanilla investment has established for itself a large interest in the Indian market in the last half-decade. While the capital is inviting both for the target and the investors, the truth is that the devil is in the details and we are but all too familiar with the consequential efforts that are involved: the mammoth planning, the scrutinizing due diligence, the tightrope negotiations, the lengthy agreements and the tense atmosphere as one proceeds towards closing. Much time and money is spent, willingly or not, on advisors: legal and financial. Due to the intense diversification in the market, many law firms offer specialized services in the area of private equity, making the job of selecting the right law firm, worth pondering over. While it is easy to go for the big names in the market, it is also worthwhile to explore and think a bit out of the box. Finalizing on the right law firm is a task less favoured albeit inevitable for the investor and the company, depending on the nature and scope of legal counsel sought. This article is a modest attempt to give key pointers that are decisive while spotting and finalising your legal adviser keeping in mind the typical stages where legal counsel would add value. Although the bigger picture looms large and attractive to fund managers such as the kind of investments to be made, the investing vehicle and the quantum of the investment, it is necessary to have a sound off on any legal, tax or regulatory obstacles. Assuredly, the exercise pays dividends in the long run. Therefore, the key criteria is the knowledge and experience of the law firm as your legal counsel would review or advise on the legal aspects of structuring, the term sheet and negotiate the conditions, shareholder rights, or at the very least, keep you informed of the

Drafting and negotiations

While many tend to think that drafting is a relatively simple exercise due to the large number of templates that are easily available on the internet and otherwise, drafting without an understanding of the industry or the mechanics of the business of the company or the specific transaction as a whole per se, would churn out a document dead in letter or spirit, yet a whitewashed tomb! It is also important for the law firm working on the transaction to ensure that the teams working both on the due diligence and the transaction have the same knowledge input with respect to the transaction.

Closing Assistance
An unrelenting lawyer or an unrelenting investor backed by an unrelenting counsel, could result in a deal breaker. It is important to ensure you have signed up your counsel for closing assistance at the beginning of the engagement as the exercise is mammoth size and requires careful scrutiny. At this point, depending on the kind of

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Picking The Right Law Firm to Work With

transaction, it is useful if your counsel provides a one- stop facility for all escrow facilities, organize relations with an authorised dealer etc.

Other factors to look for

It is but obvious that it is important to choose a competent law firm who would enable the parties to understand the various covenants, rights, terms and obligations of the joint venture. Beyond the obvious, it is important to choose counsel who is familiar with private equity industry, fund structuring and the fund raising process. The legal skills one should look out for include corporate law, tax law and knowledge of regulatory regimes, often across a number of different jurisdictions (state-wise). A look at their profile and their transactions showcase is a helpful reminder. It would suffice to say that a legal counsel should have the capacity to think inside the deal i.e. to progress beyond the regulatory analysis, and develop an understanding of the clients particular concerns and sensitivities. That would increase the counsels appreciation for issues that may prove deal-breakers as opposed to issues which present an acceptable level of risk. To opt for a law firm with which you have an existing relationship is always a safe and a viable option. You are familiar with their work, commercials would not be a problem and the comfort of approachability and work flexibility tend to work towards a smooth closing of the transaction. Familiarity also plays an important role at the time of tackling negotiations as one very easily knows what your lawyer would raise and what your lawyer would prefer you to raise. Smooth and seamless communications play a very important role. However, sometimes, a new relationship around the horizon is always beneficial. One of the main reasons why looking out for a new law firm would not hurt is because while the technology remains the same for every deal regardless of fund structure, size of the deal etc., only the engineering would have to be seasoned per the transaction. Since private equity has caught up pace even among advisory firms, there is no dearth of locating a law firm having handled a PE/ VCF deal. One only needs to look deeper than the surface and you would find a whole range of firms, small, mid- size, the big names and the mezzanine levels as well. While the bigger established players have their wealth of experience and expertise through the years (literally!), the ecosystem in India has evolved considerably to enable smaller and mid-size firms also to carve out a niche for themselves with their sector specialisations, hands-on approach, a nimble approach and responsiveness, in essence, offering bang for the buck! It is also advisable to get in touch with your friends/business contacts and platforms/organisations like TiE, Venture Intelligence and the like, to get to know counsels they have worked with and request for introductions or references to law firms having the depth and breadth in terms of legal services. From a cost perspective, it would make sense to engage a mid- size to a small size counsel for small and mid- range investments. Cost factors constitute a lot especially, when the deal breaks off after the due diligence. So here you have an unmaterialized deal and an invoice for the cost of time and travel associated with such due diligence.

Spotting local presence works to a great advantage in terms of cost and time efficiency. Knowledge of the local language and local culture enhances communication. It is a value- add if the geographical reach of the law firm matches the reach of your business in the form of tie-ups or close associations. It is easier to know what to expect and what not to expect, where and how to negotiate with the other side, when you are aware of the cultural climate you are dealing with.

Conclusion
While subject knowledge and domain expertise are obviously nonnegotiable, many a time the decision also hinges on the intangibles in the equation like the engaging culture of the firm, approachability of the team and so on. At the end of the day, there really is no formula on how you pick the right law firm to work with. The choice boils down to a holistic assessment of the facts and background of each specific transaction, size of the investment and so on. While it is always tempting to walk the well-trodden path and pick one of the big players, it is also rewarding to think out of the box considering the bounty of respected newer players in the ecosystem.

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Picking The Right Law Firm to Work With

About the Authors

Bhavana Alexander

Attorney

Bhavana is a core member of the Firms Chennai office working on corporate and transactional law. A graduate of law from the ILS Law College, University of Pune, Bhavana handles incorporation of companies, post incorporation compliances, regulatory approvals and matters related to foreign investment and listed companies. She actively works with foreign funds and corporations in structuring foreign investments, direct and indirect and foreign institutional investments in India. She is a lead member of the practice area that relates to microfinance and has developed an expertise exclusively in the area of law reading to non-banking financial companies. She also works extensively in the area of law related to entities, profit- making companies, not- for profit companies and informal entities. She has also broken ground in the area related to carbon projects and trading.

Kavitha Vijay

Partner Kavitha Vijay heads the Firms Chennai office. A graduate of law from the Madras Law College, University of Madras, Kavitha assists clients in mergers, acquisitions and private equity investments through the entire transaction cycle ranging from term sheet negotiation to execution of transaction documents. She counsels clients on the myriad regulatory compliances required for new business verticals also including foreign exchange management compliances, exchange control provisions for foreign investors, issues pertaining to outward remittances, royalty payments and technology transfer arrangements. Kavitha is also active in the developing media and entertainment sector in India assisting clients with executing joint venture contracts, artist and director agreements, intellectual property strategy and licensing deals.

Sharanya G. Ranga

Partner

Sharanya heads the Firms Mumbai office after setting it up in December 2009. A graduate of law from Symbiosis Societys Law College, University of Pune, her primary area of practice includes corporate, commercial and transactional law. She regularly assists clients on legal and regulatory aspects related to inbound investments into India, entity structuring and setting up of business operations in India and is actively involved in mergers, acquisitions, company restructuring, business transfers, joint ventures and private equity investments besides advising clients on a wide range of commercial contracts. She is also active in the structuring of non-profit entities in India. Sharanya also works actively on real estate and infrastructure projects advising clients on lease agreements, pre-bid documentations, BOT and BOOT projects and related legal/ regulatory issues. She also advises on employment law matters besides working with entities in protecting their intellectual property rights and licensing deals.

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Picking The Right Law Firm to Work With

Firm Profile

UNIVERSAL LEGAL
ATTORNEYS AT LAW
UNIVERSAL LEGAL is a full service law firm with about 50 employees spread over 5 cities in India at Bangalore, Chennai, New Delhi, Mumbai and Chandigarh and exclusively affiliated to THE CHUGH FIRM in United States. We are a fast and nimble firm and pride ourselves on the fact that we are available to our clients around the clock and across jurisdictions. THE CHUGH FIRM provides corporate, tax, litigation, immigration, and M & A, services to emerging growth and mature companies. The Chugh Firm has a staff of 200 employees with 83 attorneys and CPAs, and has offices in Los Angeles, Santa Clara, Iselin NJ, Atlanta and Fairfax, VA in United States. The majority of legal professionals at The Chugh Firm are dualqualified professionals in India and the US, having worked in both jurisdictions with law firms and organizations in India, thereby providing much- needed edge to clients on various cross-border transactions. PRACTICE AREAS: We assist our clients in most areas necessary to ensure their rapid and continuing growth. These include: Private Equity General Corporate and Commercial Real Estate and Infrastructure Litigation and Dispute Resolution Intellectual Property

Employment Technology Mergers and Acquisitions Microfinance Media and Entertainment Immigration Miscellaneous
EXPERIENCE:Wespecializeinservicinginternationalclientsintheir investmentstrategiesinIndia,includingequityinvestments, technologytransfers,jointventures,whollyownedsubsidiaries, establishingbranchesandoffices.Wefurthernotonlyspecializein addressingissuesrelatedtoinformationtechnology,staffing, corporate compliance and cross border legal consulting for multi-jurisdictionalbusinesses,wealsohaveconsiderableexpertisein othersectorsaswell,withabroadrangeofexperienceinthe strategisation,negotiation,draftingandenforcementofagreements, as well as a talented and hardworking team dedicated to the strategisation andstructuringofcrossborderdeals,aswellasa litigationteam capableofhandlingtheprocessesofthecourtsand administrativebodies. OFFICES: Our offices are to be found at convenient locations in Bangalore, Chennai, New Delhi, Mumbai and Chandigarh in India and Los Angeles, New Jersey, Silicon Valley and Atlanta in the United States.

# 312, Turf Estate, Shakti Mill Lane, Off Dr. E. Moses Road, Mahalaxmi, Mumbai - 400011 Telephone +91 22 4004 6647 Facsimile +91 22 4004 6648 Email: info@universal-legal.com

BANGALORE # 302, Regency Enclave, 4 Magrath Road, Bangalore - 560 025 Phone: +91 080 4123 3140 / +91 080 4123 3240 CHENNAI #9/5 Padmanabha Nagar, II, Street Adyar, Chennai 600 020 Phone: +91 044 4218 7856 / +91 044 4218 7857 NEW DELHI # A-2, East of Kailash, New Delhi-110 065 Phone: +91 011 4658 1691 / +91 011 4658 1692 CHANDIGARH # SCO 170-172, IV Floor, Sector 17-C, Chandigarh-160 017 Phone: +91 0172 3042032 / +91 0172 3042033

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Handbook on Venture Capital

Entrepreneurs Perspective
Entrepreneurs who have already partnered VC investors, point out the ability to accelerate growth as one of the key reasons for choosing to go in for this type of financing. For many, the process of raising VC investments itself brought with it rigorous financial discipline and clearer business focus. It also makes the company attractive for follow on investors, including public markets.
"UTI Ventures was associated with Excelsoft for over seven years. Initially, we helped the company in fine-tuning its business model and target-market focus. Though the Company presented exit possibilities earlier, sensing the true potential of the Company, we have waited patiently. Our patience has paid-off. We are very pleased to note that this is one of the best exit multiples realized by any VC/PE Investor in India, says Raja Kumar, MD & CEO, UTI Ventures. Sudhanva says the presence of financial investors provided a pressure point that made us stronger. To other entrepreneurs, his advice would be: Opt for an investor who knows the business, and is product- and IP-oriented. The investor should appreciate your model, and understand your market. PE/VC Impact: HR systems, legal framework, overseas market knowledge Sounding board for product ideas and validate assumptions Funding for niche product development

Case Study
Excelsoft Technologies
Sector: E-learning Tools Mysore-headquartered software services provider Excelsoft decided to focus on e-learning when it was not fashionable to do so. We were encouraged by some of the successful large-scale online education implementations abroad and saw a huge opportunity there, recalls D Sudhanva, CEO. Nine years down, his decision appears vindicated. The company is into a range of businesses in the e-learning space including consulting, product design & engineering, custom software development and content development. In 2001, for funding as well as for tapping business expertise, Sudhanva turned to UTI Ventures. UTI Ventures helped us in two ways, he observes. They offered a sounding board for our product ideas; and they lent us the business exposure we lacked. Result: Excelsoft now caters to corporations, universities, schools, publishers, e-learning portals and governments across the world, developing platforms under the brand Saras. Investors: UTI Ventures (now Ascent Capital), DE Shaw, Arohi Asset Management Private Equity and Excelsoft: Excelsoft raised its first round of funding - of Rs. 2.5 crores - from UTI Ventures in 2001. Sudhanva says the role of the UTI Ventures was particularly helpful because Excelsoft had a strong niche product focus that the investors understood, observes. Also, they were willing to wait for the venture to shape up. The company has recently seen a change of investors. In April 2008, UTI Ventures sold its stake in the company to DE Shaw. In September 2008, another overseas investor, Arohi Asset Management, also chose to invest in the firm.

Case Study
Spectramind eServices
Sector: Business Process Outsourcing / IT-enabled Services PE / VC Investors: ChrysCapital, HDFC Transaction Summary: Raised $10 million in 2000 to launch operations. Was acquired by Wipro in 2002 for about $100 million. While there have been successful Venture Capital-funded companies both before and after, the Spectramind story will enjoy its pride of prominence in the history of the Indian VC industry for several reasons. This pioneering venture-backed enterprise helped create an entirely new industry in India that today guarantees a well paying job to virtually any fresh college graduate (something that only an engineering degree could earlier guarantee). For India's VC industry struggling from the collapse of the Internet bubble Spectramind's acquisition by IT services giant Wipro in 2002 helped convince investors that multi bagger exits are possible within the country (and that too in a short period). Having done it before in the captive BPO business, the Spectramind team was well aware about the need for creating capacity what he calls the readiness to serve before pitching to customers. The company acquired a 58,000 square feet office building in Gurgaon before it had signed up any customers. Quite a few people thought we were crazy," Roy recalls.

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Entrepreneurs Perspective

Given that third party BPO was entirely new territory, the venture funding enabled the Spectramind management to convince the first set of employees to come on board We used the bank balance to actually prove to potential employees that we had enough money to pay their salaries for the next year-and-a-half even if we do not get a single customer! The Exit In 2002, Spectramind started to look out for its second round of funding. The company decided to go for a strategic investor in order to get better access to customers, deeper pockets and a brand rub off. Wipro thus initially came in as an investor with a 24% stake. Within nine months of making the original investment, Wipro decided that it liked Spectramind so much that it offered to completely acquire the now 2,700 people company for about $100 million. The $10 million investment Spectraminds investors had put in 2000 had become worth over $60 million in about 2.5 years. After integrating Spectramind with Wipro, Roy moved on to launch his fourth venture - Quatrro - in mid-2006. Quatrro, which is focused on high end BPO services.

Challenges Valuation is one area where the interests of the entrepreneur are diagonally opposite to that of the investors, Raman Roy says. Valuation was a challenging issue when we raised capital for Spectramind and it was as challenging when we did it for Quatrro. While VC investors would like founders to have enough skin in the game to remain motivated, in the absence of any perfect methodology for valuations, it often comes down to subjective judgment. And it is something that can often cause heart burn. Roy also feels that the deal documentation especially the kinds of clauses required by VCs is another area that poses challenges for entrepreneurs. In the case of both Spectramind and Quatrro, there were no service providers representing either the company or the investors. Roy feels the quality of intermediaries varies hugely and if a wrong one is chosen, it can often spoil a good deal.

Entrepreneur Quotes
We chose the PE/VC route because it brings with it knowledgeable people who understand our differentiation, what we were trying to build and the kind of market potential we were going after. The year we raised Rs.40 crore, we were able to scale up our Rs.25 crore company into one almost 6 times that. The fund can be the largest venture fund, but if you cannot have the right equation with the person on your board, then it can be a mess. - Mahesh Choudhary of Microqual If an entrepreneur is looking to raise money, he/she should first have a clear business model. Especially in Education, where there are probably several players in each segment, to bring that level of differentiation and relevancy, you need to find your sweet spot. Apart from thi, PE/VC investors want you to have a good management team, a good Network within the industry, the ability to bring in the right people quickly and especially strong execution capabilities. In a field like Education, it's often not about breakthrough ideas; it's about meticulous execution on the ground. So if you have that sort of experience in your team and the diligence to look at micro details, that would be a great asset when it comes to raising VC funding. - Uma Ganesh of Global Talent Track We needed capital for growth and VC financing is the least risky capital from an entrepreneur's perspective - Anupam Mittal of Mauj Telecom

In small biotech firms, most VCs play a very major role in shaping the destiny of the companies. VC investors especially help in attracting good talent to such companies. Dr P .M. Murali of Evolva Biotech

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The Flip Side

Can Capital be a Curse?

By Sanjay Anandaram
being asked, yet again. Our story was so attractive! Board meetings were casual and friendly without too many questions being asked. I was essentially given a free hand. But we hit a wall over the next 18 months. Actually, several walls. Our receivables position was becoming alarming as distributors and retailers were facing a credit crunch, our procurement costs were still very high, logistics and warehousing costs were not reducing, attrition in sales was increasing, only some designs were selling while we had a huge inventory of unsold designs, export orders had got rejected on account of damages in transit and some big retailers were very keen to renegotiate sales commissions and payment terms. Our board was getting concerned since we were also running low on cash. Existing investors provided additional funds, this time as a loan to be converted into equity when we raised more money later. This time they asked more questions and ensured that the loan had certain covenants attached. Unfortunately, this money too proved too little as we were unable to successfully negotiate the changed market circumstances. Investors were very upset and refused to provide any more capital. They were realizing how quickly the money had gone down the chute they hadnt bothered asking too many questions or trying to understand the costs, product, business model and pricing issues. We too were busy trying to build great products, designs and brand without worrying about fundamentals. There was too much money that came our way too easily. We didnt have to work hard to justify our business plan. There was therefore no discipline and rigour. Investors were carried away as well with the team and plan and the promise. Easy come, easy go is an old saying. If somethings not been really earned but been almost handed over as an entitlement or a gift, its value tends to get undermined over time, sometimes very rapidly as in the above example. There are enough examples all around of all types of businesses that have lost their way because they came into too much money without being questioned and without having to really work hard in a disciplined and focused manner.

The CEO naturally looked downcast as he pondered the imminent shutting down of his company which had a well known brand and enjoyed a reputation as a maker of high quality, well designed products. The management team seemed energetic and enthusiastic. Yet why had things had come to such a pass? I think we had too much easy money, said the CEO. I asked him to explain what he meant. When we started the company, the team, the concept, the business model and the market opportunity were all very attractive to investors who, flush with capital from freshly raised funds, were eager to make investments. Given this interest, we raised funds at a very attractive valuation in less than 45 days and without having to answer too many questions. We believed we were unstoppable. We set up a great office in a not inexpensive part of town, created a very informal and casual culture with flexi-times, set up excellent infrastructure to enhance productivity and hired the best. It seemed like we were the darlings of the media as well. Our launch event was very well attended and our products were exceedingly well received everyone appreciated the quality, the innovative design, the choices, the colours and our commitment to society. You see, wed also promised to donate a certain percentage of our sales to the under-privileged. Soon we signed up distributors to sell our products as well.

Then what happened?

Well, the market started slowing down and we didnt see it soon enough. We kept insisting that the market had yet to fully appreciate our products, business model and goals. That the market would soon learn to value high quality, top designs and the choices that were on offer. However, to keep sales ticking, we were forced to drop prices. To still keep making money with our cost structure, we convinced ourselves that we had to have higher volumes of sales. To achieve this, we had to go national more distributors and retailers, more warehouses, more sales and support people, more procurement and manufacturing, more marketing, more investment in IT systems and the like. And of course, all this required more funds. We had no problem in raising this additional financing with no real questions

About the Author

Sanjay Anandaram
Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings close to two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. Hes involved with Nasscom, TiE, IIMBangalore, and INSEAD business school in driving entrepreneurship.

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Premium Listings - Gold

Mumbai Angels
www.mumbaiangels.com Mumbai Angels (MA) is a leading Angel network in India with over 150 members and 35 portfolio companies. MA invests USD 100,000 to 500,000 and provides a unique platform to start up and very early stage companies by bringing them face to face with successful entrepreneurs, professionals and executives who are interested in and have the funds available to invest in startup companies. Many members of Mumbai Angels have prior Silicon Valley experience. In addition to the capital of its members, the Mumbai Angels provides access to high quality mentoring, vast networks in India and abroad and inputs on strategy as well as execution.
Preferred Sectors: Sector agnostic Investment Range: $ 100,000 500,000 Select Investments (upto 10): Inmobi, Apalya, Onward Mobility, Exclusively.in, Myantra, Reverse Logistic, Mobstac, Hotelogix, Zipdial, Canvera We are looking for: Early stage companies having passion to create world class global entity.

Office Address:
Mumbai Angel Venture Mentors, 111, Industrial Area, Cinemax Lane, Sion (East), Mumbai 400022 India Tel: +91 22 2409 1676 Fax: +91 22 2403 7008

Contact Persons:
Anil Joshi Email: anil@mumbaiangels.com Ashpi Gupta Email: ashpi@mumbainagels.com Payal Shah Email: payal@mumbaiangels.com

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Nexus India Capital Advisors Pvt Ltd

www.nexusvp.com

Logo

Nexus Venture Partners is India's leading venture fund and invests in early stage companies across sectors. The Nexus team comprises successful entrepreneurs and understands the unique challenges faced in building a business. Our partner companies have access to the entire Nexus team in India and Silicon Valley. We also have a seed program to support high potential entrepreneurs with breakthrough ideas.

Preferred Sectors: Technology, Internet, Media, Consumer, Business Services Investment Range: $ 1-10 Million Select Investments (upto 10): Cloud.com (Cloud provisioning platform acquired by Citrix), Gluster (Open source cloud storage, acquired by Red Hat), Pubmatic (Publisher Ad revenue optimization), DimDim (Open Source Web Conferencing acquired by Salesforce.com), Snapdeal.com (Daily deals platform), Mapmyindia (Digital Navigation), Netmagic (Managed Services and Cloud), Komli (Online ad network), SohanLal Commodity Management (Agrilogistics solutions), Greywater (Waste water treatment products), EyeQ (Eye care chain) and Bigshoebazaar (Online wholesale cash & carry platform). We are looking for: Passionate entrepreneurs addressing a large market opportunity; Innovative product or business model addressing a significant customer pain point.

Office Address:
Indian Advisor Nexus India Capital Advisors Pvt Ltd G-2, Sarjan Plaza, 100 Dr Annie Besant Road, Worli Mumbai 400018 India Tel: 022-66260000 Fax: 022-66260001 Other Office Locations: Menlo Park, CA, USA

Contact Persons:
Sandeep Singhal Email: sandeep@nexusvp.com Suvir Sujan Email: suvir@nexusvp.com Anup Gupta Email: anup@nexusvp.com

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Inventus Capital Partners

www.inventuscap.com

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Inventus Capital Partners is a US-India venture firm managed by successful entrepreneurs and industry operating veterans who have guided and financed nearly 100 entrepreneurs with operations in India and/or Silicon Valley. Inventus backs entrepreneurs first and foremost. The companies financed by the Inventus managers over their careers have achieved nearly three dozen successful IPOs or mergers, to date, resulting in the creation of over $30 billion in aggregate wealth and market value for the company founders and shareholders.

Office Address:
Inventus Capital Partners 507, 4th Floor, Oxford Towers 139, Old Airport Road Bangalore 560 008

Contact Details:
Website: http://www.inventuscap.com Contact email id: jk@inventuscap.com

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Directory Section - Active Incubators

Abiyan All India Association of Industries Mumbai T: 91 22 2201 9265 www.aiaiindia.com

Mumbai Angels
Lucknow T: 91 90053 72642 www.abhiyaniiml.com/node

Anil Joshi
Amity TBI Noida T: 91 120 465 9000 www.amity.edu/aii/ Amrita TBI Kollam T: 91 476 280 4523 www.amritatbi.com/index.html

Bannari TBI Sathyamangalam T: 91 4295 226 322 www.bittbi.com

BEC STEP Bagalkot T: 91 8354 220 689 www.becbgk.edu/beckstep.html

BMInstitute of Engineering & Technology Sonipat T: 91 130 223 0563 www.bmiet.net/index.aspx

Centre for Biotechnology Incubator Chennai T: 91 98403 48173

Centre for Entrepreneurship Gurgaon T: 91 124 234 3655

Center for Entrepreneurship - SPJIMR Mumbai T: 91 22 2623 7454

www.spjimr.org/centre_entrepreneurship/home.asp

CIIE, IIM A Ahmedabad T: 91 79 6632 4201 www.ciieindia.org

D.K.T.E. Societys Kolhapur T: 91 230 242 1300 www.dktes.com/home.htmlg

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EDC EDC Bhavnagar T: 91 278 242 9852

Mumbai Angels
Ambala T: 91 1731 275 792

Anil Joshi
EDC Radaur T: 91 1732 277 314 EDC-Faraday Bicentanary Sciente Park Guwahati T: 91 361 260 6610 www.edccottoncollege.org/index.htm

EDC-Jawaharlal Nehru College Pasighat T: 91 368 222 2496

EDC-SNIST Hyderabad T: 91 8415 223 001

E health-TBI Bangalore T: 91 80 2642 0001 www.ehealthtbi.com/index.htm

Ekta Incubation Centre Kolkata T: 91 33 2367 3978 www.technologyembryo.com

Entrepreneurship Development Institute of India Gandhinagar T: 91 79 2396 9151 www.ediindia.org

FMS,Entrepreneurship Cell Delhi T: 91 88009 49495 www.ecell-fms.org/home

GNEC-STEP Ludhiana T: 91 161 249 0339 www.gndec.ac.in

HBTI-STEP Kanpur T: 91 512 256 2536 www.stephbti.org/index.htm

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ICICI KP ICRISAT Hyderabad T: 91 40 3071 3071 www.icrisat.org/

Mumbai Angels
T: 91 40 2348 0022 www.iciciknowledgepark.com/

Hyderabad

Anil Joshi
Incubation and Entrepreneurship centre,SRM Chennai T: 91 44 2474 2836
www.srmuniv.ac.in/incubation_entrepreneurship.php? page=overview

IndiaCo Ventures Pune T: 91 20 2551 3254 www.indiaco.com

Indian school Gachibowti-EDC Hyderabad T: 9140 2318 7100

International RCI Road-EDC Hyderabad T: 91 40 24457 1047

Innovation Centre Manipal T: 91 820 292 2323 www.manipal.edu/HOME/Pages/Welcome.aspx

IT BHU, Varanasi Varanasi T: 91 542 236 8427 www.itbhu.ac.in/

JSSATE STEP Noida T: 91 120 240 1484 www.jssstepnoida.org/index.asp

KIITCIE Bhubaneswar T: 91 674 272 5466 www.kiitincubator.in

Krishna TBI Ghaziabad T: 91 120 267 5314 www.kiet.edu

Kukhatapally-EDC Hyderabad T: 91 40 2305 2650

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MICA MITCON Pune T: 91 20 2553 3309 www.mitconindia.com

Mumbai Angels
Ahmedabad T: 91 2717 308 250 www.mica.ac.in/mode/home

Anil Joshi
NDBI Ahmedabad T: 91 79 2662 3692 www.ndbiindia.org NDRI Karnal T: 91 184 225 2800 www.karnal.gov.in/res_ndri.asp

Netaji Subhash Institute of Technology New Delhi T: 91 11 2509 9050 www.nsit.ac.in

NIT Calicut http://www.nitc.ac.in

NITK-STEP Surathkal T: 91 824 247 5490 www.nitkstep.org/index.htm

NMAM Institute of Technology Nitte T: 91 8258 281 263

NSRCEL Bangalore T: 91 80 2699 3769 www.nsrcel.org/home

Osmania University-EDC Hyderabad T: 91 40 2709 8254 www.uceou.edu

Periyar TBI Vallam Thanjavur T: 91 4326 264 520 www.periyartbi.org/ptbi/index.html

PSG-STEP Coimbatore T: 91 422 436 3300 www.psgstep.org

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RTBI-IIT Shriram Institute For Industrial Research Delhi T: 91 11 2766 7267 www.shriraminstitute.org

Mumbai Angels
Chennai T: 91 44 6646 9872 www.rtbi.in

Anil Joshi
SIDBI IIT Kanpur T: 91 512 259 6646 www.iitk.ac.in/siic SINE Mumbai T: 91 22 2576 7072 www.sineiitb.org

SJCE STEP Mysore T: 91 821 254 8321 www.sjcestep.in

STEP Bhopal T: 91 755 405 1000 www.manit.ac.in

STEP-BIT Ranchi T: 91 651 227 544 www.bitmesra.ac.in

STEP IIT Kharagpur T: 91 322 228 1090 www.stepiitkgp.in

STEP-IIT Roorkee T: 91 1332 272 337

STEP-NSIC Technical Services Centre Rajkot T: 91 281 238 7613

STEP-TIET Patiala T: 91 175 239 3011 www.nstedb.com/fsr-tbi09/STEP9/About.html

STP Pune T: 91 20 2293 2644 www.stpp.soft.net

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Tamil Nadu Agricultural University (TNAU) TBI Erode T: 91 4294 226 650 www.tbi-kec.org

Mumbai Angels
T: 91 422 661 1201 www.tnau.ac.in/index.html

Chennai

Anil Joshi
TBI-Anna University Chennai T: 91 44 223 50772 www.annauniv.edu/act/cbt/index.htm TBI BITS, Pilani, T: 91 1596 245073 www.discovery.bits-pilani.ac.in/tbi

TBI Composites Bangalore T: 91 80 6599 7605

www.compositestechnologypark.com/ detailsofctp.htm

TBI-ICT Hyderabad T: 91 40 2719 3030

TBI-Indira Gandhi Institute of Technology Delhi T: 91 11 2659 1057

TBI Chennai T: 91 44 2539 9422 www.unom.ac.in/index.html

TBI Univ. of Delhi Delhi T: 91 11 2411 6559 www.nstedb.com/institutional/tbi-center.htm

TBI-UOH Hyderabad T: 91 40 2313 5000

Technopark Trivandrum T: 91 471 270 0222 www.technoparktbi.org

TeNeT Chennai www.tenet.res.in

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Mumbai Angels
The Hatch Chandigarh www.thehatch.in/index.html

The Lemelson Recognition & Mentoring Programme Chennai T: 91 44 2257 8061

www.icandsr.iitm.ac.in

Thiagarajar College of Engineering (TCE) Madurai T: 91 452 248 2240 www.tce.edu

TREC STEP Tiruchirappalli T: 91 431 250 0085 www.trecstep.com

University Institute of Engineering & Technology (UIET) Truesoft Ventures

www.truesoft.in

Kurukshetra T: 91 1744 239 155

www.uietkuk.org

University of Kashmir Srinagar T: 91 94194 04789

Venture Centre NCL Pune T: 91 20 6401 1026 www.venturecenter.co.in

Visvesvaraya Technological University Belgaum T: 91 831 240 5453

VIT-TBI Vellore T: 91 40 2313 5000 www.vittbi.com

Welding Research Institute Tiruchirappalli T: 91 431 2577820

INTELLIGENCE

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Handbook on Venture Capital

Listing of Active Angel Investor Groups

Mumbai Angels
Anil Joshi anil@mumbaiangels.com 91 22 2409 1676 www.mumbaiangels.com

C Cube Angels www.ccubeangels.com

Chennai Angels www.thechennaiangels.com

Hyderabad Angels T: 91 40 6451 3397 www.hyderabadangels.in

Indian Angel Network T: 91 11 4075 5713 www.indianangelnetwork.com

Kutchi Angel Network T: 91 98672 40320 www.kan.net.in

(Focused on Gujarat's Kutchi community)

Mumbai Angels T: 91 22 2409 1676 www.mumbaiangels.com

Tempus Capital www.tempuscapital.in

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Handbook on Venture Capital

Listing of Active Seed Capital Investors

Nexus Ventures
Sandeep Singhal sandeep@nexusvp.com 91 22 6626 0000 www.nexusvp.com

Accel India T: 91 80 4123 2551 www.accel.com

Blume www.blumeventures.com

Epiphany Ventures T: 91 22 2652 8635 www.epiphanyventures.in

Headstart Ventures www.headstartventures.in

Indavest T: 91 80 4148 3223 www.indavest.com

IncuCapital T: 91 20 2556 0254 www.incucapital.com

KAE Capital T: 91 22 2202 4184 www.kae-capital.com

Navam Capital T: 91 33 4025670 www.navamcapital.com

INTELLIGENCE

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Handbook on Venture Capital

Listing of Active Seed Capital Investors

Nexus Ventures Ojas Venture Partners T: 91 80 4061 0300 www.ojasventures.com

Mumbai Angels
T: 91 22 6626 0000 www.nexusvp.com

Sandeep Singhal
Seeders T: 98311 89489 www.seeders.in Seedfund T: 91 22 2490 2201 www.headstartventures.in

Singularity Ventures www.singularityventures.in

Ventureast Tenet T: 91 44 2432 9864 www.ventureast.net

INTELLIGENCE

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Handbook on Venture Capital

Listing of Active Venture Capital Investors

Nexus Ventures
Sandeep Singhal sandeep@nexusvp.com 91 22 6626 0000 www.nexusvp.com

Inventus
Samir Kumar samir@inventuscap.com 91 80 4213 1235 www.inventuscap.com

Accel India T: 91 80 4123 2551 www.accel.com

Artiman Ventures T: 91 80 2509 1453 www.artimanventures.com

Basil Partners T: 91 22 6112 0901 www.basilpartners.com

Canaan Partners T: 91 124 430 1841 www.canaan.com

INTELLIGENCE

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Handbook on Venture Capital

Listing of Active Venture Capital Investors

Capital 18 T: 91 120 434 1818 www.capital18.com Clearstone Ventures T: 91 22 6630 7257 www.clearstone.in

Mumbai Angels
T: 91 22 4070 0331 www.colcap.com

Columbia Capital

DFJ T: 91 80 6782 3900 www.dfj.com

Sandeep Singhal
Footprint Ventures T: 91 80 4110 1910 www.footprintventures.com Foundation Capital T: 1 650 614 0500 www.foundationcapital.com

Greylock Partners T: 91 80 4060 0664 www.greylock.com

GVFL T: 91 79 4021 3900 www.gvfl.com

Mumbai Angels
T: 91 22 3953 7447 www.headlandcp.com

Headland Capital

Helion Ventures T: 91 80 4018 3333 www.helionvc.com

Sandeep Singhal
IDG Ventures India T: 91 80 4043 4836 www.idgvcindia.com Innosight Ventures T: 91 44 4299 4352 www.innosightventures.com

INTELLIGENCE

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Handbook on Venture Capital

Listing of Active Venture Capital Investors

Intel Capital T: 91 80 2507 5000 www.intel.com/capital/india/default.htm

Inventus Capital Partners T: 91 80 4213 1235 www.inventuscap.com

Mumbai Angels
T: 65 6224 6383 www.jafcoasia.com

Jafco Asia

KPCB T: 1 650 233 2750 www.kpcb.com

Sandeep Singhal
Lightspeed Ventures T: 91 11 4980 0800 www.lightspeedvp.com Matrix Partners India T: 91 22 6768 0000 www.matrixpartners.in

NEA-IUV T: 91 80 67159600 www.neaiuv.com

Nexus Ventures T: 91 22 6626 0000 www.nexusvp.com

Mumbai Angels
T: 91 22 6150 1111 www.nvp.com

Norwest

Ojas Venture Partners T: 91 80 4061 0300 www.ojasventures.com

Sandeep Singhal
Qualcomm Ventures T: 91 80 3984 1800 www.qualcomm.com Reliance Technology Ventures T: 91 22 3032 7399 www.relianceventure.com

INTELLIGENCE

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Handbook on Venture Capital

Listing of Active Venture Capital Investors

SAIF Partners Mobile: 91 98664 61770 www.sbaif.com Seedfund T: 91 22 2490 2201 www.seedfund.in

Mumbai Angels
T: 91 80 4124 5880 www.sequoiacap.com

Sequoia Capital India

Sherpalo Ventures T: 91 22 615 99 500 www.sherpalo.com

Sandeep Singhal
Silicon Valley Bank Capital T: 91 80 4112 8282 www.svb.com Sierra Ventures T:1 650 854 1000 www.sierraventures.com

SoftBank China & India Holdings T: 86 136 6195 5671 www.softbankci.com

Trident Capital T: 1 650 289 4400 www.tridentcap.com

Mumbai Angels
T: 91 44 2432 9864 www.ventureast.net

Ventureast

Sandeep Singhal

INTELLIGENCE

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Handbook on Venture Capital

Listing of Active SME Investors

Aureos India Aquarius T: 91 80 4112 4880 www.aquarius.com.sg

Mumbai Angels
T: 91 22 3068 5500 www.aureos.com

Sandeep Singhal
Avigo Capital T: 91 11 43683300 www.avigocorp.com Bessemer T: 91 22 6616 2000 www.bvp.com

BTS India Fund T: 91 22 6697 8292 www.btsadvisors.com

Canbank Ventures T: 91 80 2558 6506 www.canbankventure.com

Mumbai Angels
T: 91 80 4154 0240 www.eplanetventures.com

ePlanet Capital

Frontline Strategy T: 91 22 2826 4534 www.frontlinestrategy.com

Sandeep Singhal
Gaja Capital T: 91 22 2421 2280 www.gajacapital.com Headland Capital T: 91 22 3953 7447 www.headlandcp.com

Helix Investments T: 91 22 6615 7324 www.helix-investments.com

IFC T: 91 11 4111 1000 www.ifc.org

INTELLIGENCE

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Handbook on Venture Capital

Listing of Active SME Investors

IFCI Ventures Kotak PE T: 91 22 6626 0500 www.privateequityfund.kotak.com

Mumbai Angels
T: 91 11 4179 2800 www.ifciventure.com

Sandeep Singhal
Kubera Partners T: 91 22 4034 8600 www.kuberapartners.com
(Outsourcing Focussed)

NEA T: 91 80 6616 9501 www.nea.com

Mayfield T: 91 22 6627 3000 www.mayfield.com

Paracor India T: 99670 59432 www.paracorcapitaladvisors.com

Mumbai Angels
T: 91 80 4261 3300 www.zephyrpeacock.com

Zephyr Peacock India

Sandeep Singhal

INTELLIGENCE

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Handbook on Venture Capital

Listing of Active Social Investors

4B Capital Aavishkaar T: 91 22 4200 5757 www.aavishkaar.in

Mumbai Angels
T: 91 80 0896 2828 www.4bcapital.com

Sandeep Singhal
Aavishkaar Goodwell T: 91 22 4200 5757 www.aavishkaargoodwell.com Accion International T: 91 80 4112 0008 www.accion.org

Acumen Fund T: 91 22 6758 9365 www.acumenfund.org

Bellwether T: 91 40 6646 0505 www.bellwetherfund.com

Mumbai Angels
T: 41 22 596 4777 www.blueorchard.com

BlueOrchard

Creation Investments T: 1 312 784 3988 www.creationinvestments.com

Sandeep Singhal
Developing World Markets T: 1 203 655 5453 www.dwmarkets.com Dia Vikas Capital T: 91 124 452 9500 www.dia-vikas.org

Elevar Equity T: 91 80 4335 6666 www.elevarequity.com

Grassroots Business Fund www.gbfund.org

INTELLIGENCE

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Handbook on Venture Capital

Listing of Active Social Investors

Gray Ghost Ventures IFMR Trust T: 91 44 6668 7000 www.ifmrtrust.co.in

Mumbai Angels
T: 1 678 365 4700 www.grayghostventures.com

Sandeep Singhal
Impact Investment Partners www.impactinvestmentpartners.com Incofin T: 91 44 26416624 www.incofin.be

Mumbai Angels
T: 971 4 317 5800 www.legatumcapital.com MI india T: 91 124 452 9500 www.miindiacapital.org

Legatum

Lok Capital T: 91 124 470 9700 www.lokcapital.com

Michael Dell Foundation T: 91 11 41666300 www.msdf.org

MicroVest T: 1 301 664 6680 www.microvestfund.com

Mumbai Angels
T: 91 22 6118 7300 www.omidyar.com Unitus T: 91 80 4112 0008 www.unitus.com

Omidyar Network

Sandeep Singhal
Song Investment Advisors T: 91 40 2318 7241 www.songadvisors.com

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Handbook on Venture Capital

About Venture Intelligence

Venture Intelligence, a division of TSJ Media, is the leading provider of data and analysis on Private Equity / Venture Capital and M&A deals in India. Our research is used extensively by PE/VC industry practitioners, Entrepreneurs, CXOs of large corporations, financial and strategic investors, the media as well as government/regulatory agencies. Our customers include leading PE / VC Firms, Limited Partners, Investment Banks, Law Firms, HR Services Firms, Corporations and Consulting Firms. Venture Intelligence products are a one point source for information and analysis on: Private Equity, Venture Capital and M&A deals Companies looking for investors and M&A deals New Funds being raised Our products include: Databases Profiles of all Private Equity, Venture Capital and M&A deals since 1998 Includes searchable profiles of all PE/VC firms and PE/VC-backed companies Newsletters Daily format for practitioners in the deal ecosystem Weekly format for the convenience of entrepreneurs Private Equity & Venture Capital Reports Quarterly and Annual reports on PE & VC trends Directories Private Equity & Venture Capital Directory Limited Partners Directory Directory of Early Stage Investors Investment Bank Directory Conferences Venture Intelligence conferences are a leading platform that bring together investors and entrepreneurs in a focused manner that facilitates discussion and networking. Speakers at Venture Intelligence Conferences are typically investors, entrepreneurs and CXO/Board-level executives from accomplished companies.

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