Insights
Private Markets Intelligence
Guides on ESOP taxation, cap tables, secondary transactions, and India's private market ecosystem.
What Is a Preference Multiple in a Startup Term Sheet? 1x, 2x, and 3x Explained
A preference multiple is a number in the liquidation preference clause of a startup term sheet that determines how much an investor receives before any distribution to common shareholders in
Drag-Along Rights in Indian Startups: How They Work and What to Negotiate
Drag-along rights are a provision in startup shareholders' agreements that allow a majority shareholder, or a defined threshold of shareholders, to compel all other shareholders to join a sale
What Happens to ESOP Holders in an Acquisition? How the Exit Waterfall Affects Employees
When an Indian startup is acquired, the exit waterfall distributes the proceeds to shareholders in a defined order. Founders and investors are typically the most discussed stakeholders in an acquisition,
Tag-Along Rights in Indian Startups: What Minority Shareholders Need to Know
Tag-along rights are a transfer restriction mechanism included in most Indian startup shareholders' agreements. They give minority shareholders the right to participate in any sale of shares initiated by
What Is a Cap Table? How Indian Startups Should Structure and Maintain Theirs
A capitalization table, universally called a cap table, is a document that records the equity ownership structure of a company. It lists every shareholder, the number and type of shares
Down Rounds in Indian Startups: What They Mean for Founders, Investors, and ESOP Holders
A down round is a funding round in which a company raises capital at a lower valuation than its previous round. The new share price is lower than the price
What Is Pro-Rata Rights in a Term Sheet? How Indian Startups Should Think About It
Pro-rata rights are a standard provision in Indian startup term sheets. They give existing investors the right to participate in future funding rounds in proportion to their current ownership, allowing
How to Model a Startup Exit Waterfall: A Step-by-Step Guide for Indian Founders
An exit waterfall is a calculation that distributes the proceeds from a company's sale or acquisition among its shareholders, in the order determined by each shareholder's
Anti-Dilution Provisions in Indian Startups: Full Ratchet vs Broad-Based Weighted Average
Anti-dilution provisions are a standard feature of CCPS terms in Indian institutional funding rounds. They protect investors when a company raises a future round at a lower price per share
Stacked vs Pari-Passu Liquidation Preferences in Indian Startups: How Seniority Affects Your Exit
When a startup raises multiple rounds of institutional funding, each new round typically introduces a new series of CCPS with its own preference terms. The relationship between those series, specifically
CCPS vs Equity Shares in Indian Startups: How Investor Share Structure Affects Your Exit
When Indian startups raise institutional funding, investors almost never take ordinary equity shares. They take Compulsorily Convertible Preference Shares, commonly known as CCPS. Understanding why investors use CCPS, what rights
What Is a Liquidation Event? How Indian Startups Define It in Their SHA
In Indian startup financing, the liquidation preference clause determines how exit proceeds are distributed among shareholders. But the liquidation preference clause only activates when a liquidation event occurs. The definition