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Fundraising Documents
Expert legal assistance for fundraising documents including term sheets, SHA, SSA, investor rights agreements, and due diligence for startups
What are Fundraising Documents?
📌 Overview
Fundraising documents are critical legal agreements between startups and investors. HLAPL provides comprehensive legal services for startup fundraising from angel investors, venture capital firms, and institutional investors, ensuring investor-friendly yet founder-protective terms.
✅ Key Aspects
Term Sheet drafting and negotiation, Shareholders Agreement (SHA), Share Subscription Agreement (SSA), Investor rights agreements (information, inspection, veto), Due diligence support (legal, financial, tax), SAFE notes and convertible notes, and ESOP pool creation for fundraising.
⚖️ Legal Framework
Fundraising documents are governed by Companies Act, 2013, SEBI (AIF) Regulations, FEMA regulations (for foreign investment), and Indian Contract Act, 1872. Term sheets are generally non-binding except for exclusivity, confidentiality, and governing law clauses.
Important FAQs
❓ What is a Term Sheet?
A Term Sheet is a non-binding document outlining key investment terms including valuation, investment amount, investor rights, and liquidation preference. It serves as the basis for drafting definitive agreements like SHA and SSA.
❓ What is the difference between SHA and SSA?
Shareholders Agreement (SHA) governs rights of shareholders (board composition, veto rights, exit terms). Share Subscription Agreement (SSA) is the contract for investor purchasing shares (warranties, indemnity, conditions precedent).
❓ What is a liquidation preference?
Liquidation preference determines how proceeds are distributed on exit/sale. Standard VC terms include 1x non-participating or 1x participating. HLAPL negotiates founder-friendly liquidation preferences.
❓ What is due diligence in fundraising?
Due diligence is comprehensive investigation by investors covering legal, financial, tax, and operational aspects of startup. HLAPL assists startups in preparing for and managing investor due diligence.
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