Malpaniventures

What does your company do
How big is the market
How much traction do you have
Unique insight/ Secret Sauce
How does your business make money
Team member and how does each contribute
How much money do you need and for what purpose?

Market segmentation or your value proposition to the identified customer groups
Show assumptions behind revenue projections
Separate fixed and variable costs so breakeven revenue can be calculated
Team member and how does each contribute
How much money do you need and for what
Working capital requirements
Cash Flow statement
Usage of funds and time period before next funding required

DUE DILIGENCE PROCESS:

Company shares the pitch deck
A deep dive call/meeting to understand the business in detail
- To understand whether the opportunity interests us
- To discuss the basic process and fund raise details
Post the call companies are asked to share :
- Financial model - actuals and projections
- Capitalisation table
- Literature on the industry and market in which business operates

Reference calls made by the team to customers, advisors and other stakeholders of the business like suppliers, previous investors etc.
- To understand industry dynamics, problem that business solves and value it adds to customers
- To take feedback on the product and management team
We connect founders with experts and other investors in our network. This helps us to :
- Collect feedback from our network to get a richer perspective on the business and team
- Investors in our network, if they are interested in the opportunity, may also choose to co-invest with us
Our team visits company's office to take product demo and meet the entire team

A term sheet to be drafted and shared with us
Reiteration of the term-sheet to finalize the clauses as per mutual agreement

Legal and accounting compliance needs to be completed
Face to face meeting between investors and promoters
SHA is circulated and post- execution fund disbursement takes place

Each step should take maximum time of a week assuming all the information is available when required.

We use a dynamic equity evaluation model to make sure our founders are treated fairly.
Agreeing on a valuation when raising funds is always a huge challenge for the founder. The entrepreneur is over optimistic, and wants his equity to be priced based on the value he is sure he will be able to create in the future, once he gets the funds. Investors are skeptical, because they have burnt their fingers in the past, and they know that the failure rate for startups is very high. Investors want to see some performance before they get comfortable with valuing the company. The founder is in a fix. How can I prove how well I can deliver without getting the funds to implement my ideas?
One solution is to use a dynamic equity pricing structure . The easiest way to do this is to infuse funds via a CCPS ( compulsorily convertible preference shares), where conversion to equity happens on a pre-defined valuation , which is linked to mutually agreed outcomes. This way the entrepreneur gets to keep as more equity , provided he is able to deliver what he said he would.
For example, let's assume a company is being financed , and the outcome on which valuation will be based will be the number of paying customers the founder is able to acquire 1 year after funding .The valuation could be ₹ X Crores for 10000 users - and ₹ X+Y Crores for very additional 1000 users. The harder the entrepreneur works , the bigger the share of the company he gets to keep, so that incentives are aligned.
A limitation of this is that metrics can be gamed to achieve desired outcomes or disagreements can come up post the agreement. For example, should paying users who drop out after a few weeks be included or not? However, if the intent is right – to create win-win outcomes many of these can be addressed before hand. If one is trying to game measurement of outcomes, one has chosen the wrong partner.

Sign Term sheet
Hire a lawyer familiar with company law to draft a Shareholder agreement
Hiring a CA / CA firm with Company secretary (CS) associates to handle ROC filings to process investment
Get agreement with investors on Shareholder Agreement. Convening a Board meeting for authorizing the execution of shareholder agreement
Execution of shareholder agreement
Issuing form PAS-4 (offer letter ) to the investors along with share application forms serially numbered
Filling of Form PAS-4 (offer letter) with the ROC within 30 days from the circulation of Form PAS 4
Completion of all Conditions Precedent (if any in the shareholders agreement)
Investors shall notify their approval, on which the Investors shall subscribe to shares
Convening a Board Meeting for issue and allotment of shares to the investors, alteration of the articles of association
Appointment of nominee director (if mentioned as part of the agreement) on the board
Receiving the nominee director’s consent in Form DIR-2
Filling of Form PAS 3 with the RoC (within 30 days from the date of the allotment of shares)
Filling of Form MGT 14 (declaration of key resolutions) with the RoC, after enclosing the closing board resolution and the shareholders’ resolution
Filling of Form DIR -12 (after attaching Form DIR – 2, providing for consent to hold the office of a director) with the RoC for appointment of nominee director (if mentioned as part of agreement)

The Advisor Playbook

Regain Liberation and Order in your Personal and Professional Life by Duncan MacPherson, Chris Jeppesen

Algorithms to Live By

The Computer Science of Human Decisions by Brian Christian, Griffiths

Badass

Making Users Awesome by Kathy Sierra

Barking Up the Wrong Tree

The Surprising Science Behind Why Everything You Know About Success Is (Mostly) Wrong by Eric Barker

Resources

DUE DILIGENCE PROCESS:

The Advisor Playbook

Algorithms to Live By

Badass

Barking Up the Wrong Tree

David and Goliath

The building a hard business when thing there are no about easy answer hard ben horowitz things

The art of thinking clearly

Maximize your potential

The design of everyday things

Don't make me think revisited

Zero to one

Talking to humans

Positioning: The battle for your mind