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Funding Instruments & Compliance
Capital is the primary requirement for setting up carrying-on any business activity and thus funding plays a very pivotal role in the success of any entity, especially startups. There are many alternative sources available for funding early-stage startups like Convertible Notes, India’s Simple Agreement for Future Equity Notes (iSAFE Notes) and other Convertible Instruments, in addition to direct equity. Selecting the right instrument, understanding its complexities and ensuring compliances thus becomes very crucial.
In the start-up world, iSAFE Notes are becoming a popular fundraising instrument for those entering the seed funding phase. iSAFE Notes are similar to Convertible Notes as they promise the holder a specific number of shares in the start-up they are investing in based on future liquidity events. However, the fundamental difference between an iSAFE Note and a Convertible Note is that the latter is a debt instrument that comes with a specified interest rate.
The other modes of funding through Convertible Instruments could be Compulsory Convertible Preference Shares (CCPS), Compulsory Convertible Debentures, and Optionally Convertible Debentures.
At SimplyBiz, we will provide advisory support by helping you evaluate various funding options that are available and select the most suitable one depending on your requirements. Our team will help you in understanding various critical aspects relating to valuation, conversion price/formula, conversion period, dilution on conversion etc., which are very important in the issue of any convertible instrument. Compliances under Company Law and Foreign Exchange Regulations ( in case of overseas funding) will be taken care of in the most seamless way.
We have assisted various start-ups in IT, fintech, sports, consulting, pharma and other sectors in identifying the right funding options. Our Team consist of qualified professionals who have handled funding of start-ups at various stages of their lifecycle like Bootstrap, Seed fund, Pre-series round and Series round.
Please reach us at hi@simplybiz.in with your requirements and we shall be happy to help.
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