need for tweaking ‘growth capital’ model in the indian context? by: ms. seema jhingan (partner)
TRANSCRIPT
Need for Tweaking ‘Growth Capital’ Model in the Indian context?
By: Ms. Seema Jhingan (Partner)
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Its time for the Investor-Entrepreneur dynamics to change
Revival of the ‘Growth Capital’ Model
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… the ‘Minority Stake with Majority Rights’ Attitude.
Investor Expectations Need to Change…
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Nomination on Board – not commensurate with investment
Mandatory Quorum Requirement
Board Level Participation
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Reserved Matters / Affirmative Voting Rights
Operational Interference
Reporting Requirements
Voting and Reporting Rights
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Anti-Dilution, Ratchet and other Pre-emptive Rights Lock-in on Transfer of Promoter Shares
ROFO and ROFR Tag Along and Drag Along
Pre-emptive and Restrictive Rights
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Public Offering Buy-Back
Put options Strategic Sale - with Drag Along
Complicated Exit Options – Do they work?
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…the mindset of ‘playing’ with Investors’ money.
Entrepreneur Expectations Need to Change...
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…is NOT free Money !
Investors’ Money...
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…need to be complied with.
Assumed Obligations...
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…to unapproved business plans is…
Diversion of Funds...
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…are for keeps.
Exit Options...
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Cooperation
Successful Growth Capital Model
Reasonableness
ContributionCompliance
Space
Delivery
Harmony
Performance
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