FAST TRACK…INC

ENTERPRENERIAL FINANCE
GROUP MEMBERS

 FAWAD AHMED MALIK

 ZAHID KHAN

 TAZEEM UL HAQ
BACKGROUND OF THE
CASE
BACKGROUND
 searching for venture capital
 meetings with Venture Analysis Group.
 The fund managers had received an unsolicited
business plan from Fast Track, and found the
concept sufficiently interesting to warrant further
evaluation.
 proposal for financing the venture
BACKGROUND
 Although many of the terms in the proposal are
common in venture capital financings, the proposed
agreement was more complex than anything the
parties had been discussing.
 A complex liquidation preference, a mandatory
redemption provision, a re-purchase provision,
registration rights, a strong anti-dilution right, and
an exclusive negotiation provision with a
substantial penalty.
PROBLEM STATEMENT

 work carefully through the proposed agreement to

understand it fully and to know how to respond.
SOLUTION TO THE
CASE
SOLUTION

 Our priority is to initiate an IPO which will benefit

both the parties.
SOLUTION
 Dividend will only be paid in form of cash, not in
the form of additional preferred stock.
 In case of sale of company, the preferred stock
holders will be paid according to the average
industry share price, instead of the 2 times payment
of the preferred stock. The dividends will only be
paid up till the date of sale of company.
SOLUTION
 The time of repayment to investors in case of
redemption will be 10 quarters.
 The investors cannot force the company to initiate
an IPO, it will be done with consensus of both
parties.
 25% shares of company will be allocated as an
option for the employees of the company.
SOLUTION
 No option for piggyback right registration of
shares.
 Dilution is not mandatory. The investors will be
having an option to avoid dilution but it will not be
necessary.
 Proper negotiations to be done to manage the
contract properly.
THANKYOU
Q&A