ROLE OF CHARTERED ACCOUNTANS

IN
VENTURE CAPITAL
AND
ANGEL INVESTING FUNCTION

Prepared By:
Anuj Shah
Brief about PPT
Brief detail about Content of Presentation

1. Brief About Venture Capital

2. Investment stages in Venture Capital
3. Investment Process Under Venture Capital Finance
4. Development of Venture Capital In India
5. Drafting of Business Plan
6. Drafting of Term Sheet
7. Few Question Usually asked by VC or Investors
“Necessity is mother of Invention”
 Mr Farhad
(Electronic and Communication Engineer)

Has went to remote Place for his Project Work

Could not able to get regular frequancy of mobile network

Thus facing problem catering the clients

Thus started thinking to solve the problem on his own

 After doing research for a long time

He found out a chip which can capture remote signal and thus can
enhance mobile network connectivity

This Just an idea

For implementing this idea Mr Farhad needs to manufacture the chip

For manufacturing chip he requires fund, which he don’t have

 So he approached Banker

Bankers has asked for

past trend, credit record, collateral security, and Explanation w.r.t.
Repayment of funds

Mr Farhad Could not justify thus banker rejected the proposal

Then he approch Mr Jain local Chartered Accountant

Mr Jain Guided him to prepare business plan and project report

 These papers were presented before Mr Thakkar and ABC Venture
Capital Fund

ABC Venture Capital Fund shown interest to fund the venture

With condition of 60% equity and more than 50% directors on Board

Mr Farhad Got money to manufacture and has sold chips to mobile

companies

Now Mr farhad’s Company is making profit and going for IPO where
ABC Venture Capital Ltd will sale entire stake at 30 times of what
they have invested
What is Venture Capital
 Venture capital is Capital/Money provided
by investors to the boost up the Venture/
IDEA
concept/idea of the entrepreneur which is a
startup firms and small businesses with
perceived long-term growth potential but PEOPLE
not having any asset to get bank finance or
not having past track record or having
limited operating history to justify the MONEY
venture revenue.

 High risk – High return STRARAGIC

INVESTMENT
Role of Venture Capitalist
Venture Capitalists generally:

 Finance new and rapidly growing companies for longer time

horizon

 Purchase equity/securities

 Assist in the development of new products or services

 Deploy professional for giving proper inputs to venture

 Add value to the company through active participation

What is Venture Capital
How Venture Capital Fund Functions
The SEBI has defined
Venture Capital Fund in
its Regulation 1996 as
‘a fund established in
the form of a company
or trust which raises
money through loans,
donations, issue of
securities or units as
the case may be and
makes or proposes to
make investments in
accordance with the
regulations’.
What is Angle Investor
 Engel Investor are the investor who invest their own fund to the
venture
 Usually Low amount of investment compared to VCF
 Usually do not prefers to be on the board
 May introduce to some VCs to dilute investment or expand
business
 Very active on investment and working very hard for venture
 Expects high returns as they invest at the conception stage
 SUPER ANGELS
Benefits of VC to Entrepreneur
 It injects long term equity finance which provides a solid
capital base for future growth.

 The venture capitalist is a business partner, sharing both the

risks and rewards.

 The venture capitalist is able to provide practical advice and

assistance to the company based on past experience with
other companies which were in similar situations

 The venture capitalist also has a network of contacts in many

areas that can add value to the company.
Benefits of VC to Entrepreneur
 The venture capitalist may be capable of providing
additional rounds of funding should it be required to finance
growth.

 They can help in defining proper marketing , operational

and financial strategy for success of the company.

 Venture capitalists are experienced in the process of

preparing a company for an initial public offering (IPO) of its
shares onto the stock exchanges or overseas stock exchanges.

They can also facilitate a trade sale.

Investment Stages
Investment stages
1. Seed Money:
Low level financing needed to prove a new idea.
2. Early stage investment/start up investment/Angel Investment:
Idea needs to be developed into product and needs to be
marketed to get commercial orders.
3. First-Round:
Product and Marketing chain has establish but funds
required for manufacturing of first commercial deal
4. Second-Round:
Working capital for early stage companies that are selling
product, but not yet turning a profit .
Investment stages
1. . Third-Round:
Also called Mezzanine financing, this is expansion money for a
newly profitable company
6. Fourth-Round/mazzanine:
Also called bridge financing, it is intended to finance the
"going public" process
Investment stages
Financial Stage Period (Funds Risk Perception Activity to be
locked in years) financed

For supporting a
Seed Money 7-10 Extreme concept or idea or
R&D for product
development

Initializing
Start Up 5-9 Very High operations or
developing
prototypes

Start commercials
First Stage 3-7 High production and
marketing
Investment stages
Financial Stage Period (Funds Risk Perception Activity to be
locked in years) financed
Expand market and
Second Stage 3-5 Sufficiently high growing working
capital need

Market expansion,
acquisition &
Third Stage 1-3 Medium product
development for
profit making
company

Fourth 1-3 Low Facilitating public

Stage/mazanine issue
Investment stages

Gestation Inception Prototype Roll out Growth Expansion Maturity

Continuous
Product Stage Idea Concept Prototype Launch Scaling up Diversification
innovation
Third stage, Asset-based
Funding Stage Pre-seed Seed Seed First stage Second stage
Bridge financing financing
VC Investment Process
Pitching/Origination
of Deal

Screening

Due diligence (Evaluation)

Deal structuring

Post investment activity

Exit plan
Opportunity introduction/ Pitching
 To get the opportunity of getting funds the entrepreneur has to pitch/ approach the
investor and introduce the concept/idea of the venture.
 He has to make a presentation with the team before the intended angels or VCs.
 Present business plan
 Concept/idea of Venture
 Executive summary
 Product
 Mile stones
 Cash flow
 Brief about management, production, finance, marketing strategy
 (only 5% business plans are read beyond executive summary, 10% passes initial
screening, out of this 10% proposal goes for due diligence and funding)( success
ration is 0.05%)
 Don’t get depressed if your idea is rejected at the time of pitching (keep exploring
apportunitities)
Screening and due diligence
 Who are the person behind the company?
 Founding Members, Key Management, Board members, Advisors
 What is the Vision of Company
 About Concept/ Product/ Technology based on which Entrepreneur will do business
 Competitiveness of Product/ services
 What is customer need and how the product is satisfying that need?
 Why your solution is better then the competitors? Or why people will approach for your product?
 Whether technology is having long term competitive advantage?
 Business Plan or marketing, operational plans are implementable?
 What is strategy to pitch the product into the market
 Through what channel or vertical will be used to sell the product
 Modalities to built momentum and building capacity to cater the momentum
 What is revenue model of the company?
 Pricing of Product- test affordability of product
 Financial Projection – Test achievable or not? (Cost as well as revenue) (break even)
 Assumptions driving financials – Test proper or not?
Mode of Venture Financing
The financing pattern of the deal is the most important element. Following are
the various methods of venture financing:
 Issue of Shares
 Equity shares( Round – satisfaction of condition – additional funding)
 Preference shares- Convertible preference shares – Restriction
 Preference shares – Non Convertible, Redeemable, irredeemable preference shares
 Generally do not exceed 49% of total equity
 Overall control remains with entrepreneur
 Beneficail to both-
 For Entreprenure- No burden of payment of interest or other charges
 For VC- Can get High return for taking risk
 VC earns CG at the time of disposal of shares

 Conditional loan
 Payout to VC will start once conditions are satisfied
 Payment generally begins once firm started making sales or started making
operating profits
 Roayalty charges / management fees once sales starts- 2 to 15% of sales
 High Interest rate post sales or other conditions satisfaction- 20 to 25% PA
Mode of Venture Financing
 Debenture or Quasi Equity or Debt Instrument
 (fixed interest rate irrespective of operations of company)
 Secured debentures, Unsecured Debentures(Companies Act restriction post 1-4-
2014)
 Convertible & Non convertible debentures- Debt equity swap
 Convertible-Debentures Redeemable at a Premium: Put Option- entitle to sell
bond to issuer(buy back or sale to promoter) at premium after certain lock in
period
 Participating debentures
 No interest at specified
 Lower Rate of interest when sales and profit generates
 High rate of interest at growth stage
 Quasi Equity- Is loan without interest or lower rate of interest with no condition
attached to it
Mode of Venture Financing

 Income note
 Combination between conventional loan and conditional loan
 To pay both interest and royalty but at comparatively lower rate

 Other Mode of finance

 Cumulative convertible preference shares( Restriction Companies act)
 Shares with differential voting right
 Equity shares, Preference shares, Debentures with call & put option
 Call Option to Holder- VC (Conversion by holder, buying additional shares or sale
shares)
 and
 put options to entrepreneur (buy back at certain price, Early redemption with
premium)
Post Investment activities-Monitoring

 Appoint a person/ persons to Monitor- day to day activity

 Reporting and analyzing the progress that venture is doing
 Will examine whether venture is doing well if not then what should be the
steps to be taken to come to the desired growth in the company
 Hire skilled manpower or professionals to Suggest operational and
stratagic decisions for the success of the venture
 Renegotiate the term if requried with the enterprenure
 Infuse further equity if required
 Make decision for exit
 Time of exit from the firm’s capital is almost never predetermined,
but depends on the development of the company.

 In successful cases, divestments take place when the company

has reached the level of expected development and the value
of the company.

 Initial public offer(IPOs)

 Trade sale- Sale of stake to strategic or financial investors
 Promoters buy back Pre-determined price or independent valuation of
shares as on the date of buyback
 Acquisition by another company (M&A)
 DEVELPOMENT
OF
VENTURE CAPITAL
IN
INDIA
Venture Capital Funds in India
 In early 70's when Govt of India appointed a committee laid
by Late Shri R. S.Bhatt to find out the ways to meet financing
for funding start-up companies based on absolutely new
innovative technologies.
 Such companies either did not get any financial support or
the funding was inadequate which resulted into their early
mortality.
 The committee recommended starting of Venture Capital
industry in India.
 In mid 80's three all India financial institutions viz IDBI, ICICI,
IFCI started investing into the equity of small technological
companies.
Venture Capital Funds in India
In Nov 1988, Govt of India decided to institutionalize Venture Capital
Industry and announce guidelines in the parliament.

Controller of Capital issues(CCI) implemented these guidelines known as

CCI for VC.

These guidelines were very restrictive and following a very narrow

definition of VC. They required Venture Capital to be invested in
companies based on innovative technologies started by first generation
entrepreneur. This made VC investment highly risky and unattractive.
Nonetheless many private initiatives were taken. At the same time World
Bank selected 6 institutions to start VC investment in India. This included
TDICICI (ICICI), GVFL, Canbank Venture Capital Fund, APIDC, RCTC (now
known as IFCI Venture Capital Funds Ltd.) and ILF (now known as
Pathfinder).
Venture Capital Funds in India
In 1995, Govt of India permitted Foreign Finance companies to make investments
in India and many foreign VC private equity firms entered India. In 1996,
government announced guidelines to regulate the VC industry. Though there were
many shortcomings these guidelines were the starting point.

In 1997, IT boom in India made VC industry more significant. Due to symbiotic

relationship between VC and IT industry, VC got more prominence as a major
source of funding for the rapidly growing IT industry. Indian VC's which were so
far investing in all the sectors changed their focus to IT and telecom industry.

The recession during 1999 - 2001 took the wind out of VC industry. Most of the
VC either closed down or wound-up their operations. Almost all of them changed
their focus to existing successful firms for their growth and expansion. VC firms
also got engaged into funding buyouts, privatisation and restructuring.

Post recession 2011 onward online retail boom has made the sector once again
hot. Flipkart, snapdeal, Ola, Hosing.com is example of the same.
Venture Capital Funds in India
VCFs in India can be categorized into following five groups:

1) Those promoted by the Central Government controlled development

finance institutions. For example:
- ICICI Venture Funds Ltd.
- IFCI Venture Capital Funds Ltd (IVCF)
- SIDBI Venture Capital Ltd (SVCL)

2) Those promoted by State Government controlled development finance

institutions.
For example:
- Punjab Infotech Venture Fund
- Gujarat Venture Finance Ltd (GVFL)
- Kerala Venture Capital Fund Pvt Ltd.
 Venture Capital Funds in India
3) Those promoted by public banks.
For example:
- Canbank Venture Capital Fund
- SBI Capital Market Ltd ( now into PE)

4)Those promoted by private sector

companies.
For example:
- IL&FS Trust Company Ltd
- Aditya Birla Venture Capital
5)Those established as an overseas venture capital fund.
For example:
-Sequoia Capital
- Blume Ventures
- Helion Venture Partners
- Accel Partners
- Nexus Venture Partners
Brief about some VC firms and
funds managed by them
SIDBI VENTURE AS MAINLY FOUR FUNDS WHICH ARE OPERATING
TODAY
Samridhi Fund (SF)
Focus on Environment, Social and Governance matters.
Corpus: 450 crore
Target sectors is MSME
Water & Sanitation, Affordable Healthcare ,Agriculture &Allied
services Clean Energy, Financial Inclusion (Includeing MFI’s),
Education ,Skill Building, etc. In the area of 8 defined states
India Opportunities Fund (IOF)
IOF is a sector agnostic fund focused mainly on growth capital
needs of India’s growing and unlisted MSMEs operating in
emerging sectors such as light engineering, clean-tech, agro-
based industries, logistics, infrastructure, educational
services, IT/ITES etc. IOF will also invest in early as well as
Sidbi VC fund details
SME Growth Fund

Object is same as mentioned in Indian Opportunity fund-fucused

on SME-High growth business.
Initial Corpus : 500 Cr
But all investments are freesed and now looking to the
divestment.
However opportunities will be raised once portfolio will be
divested and reinvested in new businesses/ventures.
National Venture Fund For Software and IT Industry (NFSIT)

SIDBI has contributed 500 million.,Ministry of Information

Technology, Government of India 300 million. And 200
million by IDBI.
launched in 1999 by Shri Atal Behari Vajpayee
IFCI VC Fund
IFCI VENTURE AS MAINLY FOUR FUNDS WHICH ARE OPERATING TODAY

 Green India Venture Fund

 India Enterprise Development Fund
 Venture Capital Fund For Scheduled Caste
 India Automotive Components Manufacturers Fund
Rajastan Venture Capital Fund

RAJASTHAN VENTURE CAPITAL FUND (RVCF) a professionally managed

and privately held company supported by 15 investors including Rajasthan
State Industrial Development and Investment Corporation (RIICO) and Small
Industries Development Bank of India (SIDBI) as lead investors.
 RVCF FUND-1 (MADE EXIT IN 9 OUT OF 10 INVESTMENTS)
 RVCF II SME Tech Fund ( INVESTMENTS ARE GETTING MATURED)
 PLANNING TO LAUNCH NEW FUND WHICH IS HAVING CORPUS OF 150
CRORE
Investing for growth capital for new and existing non listed companies in
the Information Technology, Bio-Technology, Retail, Auto, Agri-Tech,
Health Care, Tourism, Entertainment, Logistics, Packaging and other
Technology driven projects.
 Also invest in second round
Recent Development

On 23rd Jan 2015- mint reported that

- Telegana Govt begun constuction of Technology Incubator for start up in
the capital Hydrabad
- Planning to invest in the infrastructure for start up – 200 crores
- 300000 sq ft construction with hi tech infrastructure
- also tied up with IIIT-H and Nalsar univercity to IPR and other training
- Planning to create fund of 600 cores with other VC funds

Revolution has been started- Other state will also launch the same scheme
later on
VC deals 2014
 Sequoia Capital – 25 deals in 2014
Most active amongst all VC

Sequoia invested in firms like:

In the tech space
 Fashionandyou, Zomato, Olacabs, Knowlarity, Capillary, ZoomCar, Druva Software,
Octro, Tinyowl, Grofers and Akosha in the tech space.
 In the non-tech field it backed names like
 Koye Pharma and
 Indigo Paints
 part-exited from local business classifieds firm JustDial. It scored over 30x
on its original investment in 2009.
VC deals 2014
Blume Ventures - 19 deals

Size of investment is relatively smaller compared to other fund

The companies it invested last year include

TaxiForSure, VoxPopClothing, Zopper, HashCube, Instamojo, Railyatri and
Covacsis.
Other follow-on investments
Exit in Spunk Media Pvt Ltd sold to San Fransisco-based mobile payments
company Boku
VC deals 2014
Helion Venture Partners – 19 deals
Very aggressive in the year 2014
The companies it invested last year include
TaxiForSure, Housing, Yepme, BigBasket, Indiahomes, Pubmatic and Jivox

In Non Tach Industry

Shubham Housing Finance, ID Fresh Foods and Dentys (A dental chain ).
Role of Chartered Accountant
Chartered Accountant can provide their services in following areas
1. Act as mediator for angel financing function/ VC
– Help in coming to the amicable deal for benefit of both the parties

2. Helps in preparation of
1. Business Plan
2. Cash Flow forcast
3. Giving financial presentation and explaining revenue model at the time of
pitching the proposal before VC and Engle Investors

3. Suggesting suitable structure for finance in accordance with prevailing

law in India( FEMA, SEBI, Company Law etc)

4. Negotiation with VC – for valuation

5. Drafting of term sheet

6. For VC- they can do Due diligence and valuation
Preparation of Business Plan

Business plan is the most important document which VC or Angel investor will
focus thus care should be taken at the time of drafting of business plan.
Chartered Accountant has major role in defining and preparing business
plan on behalf of the client.

What should be there in the business Plan?

- Those conceret information about the venture based on what the investor
will invest in the venture.
- Should answer WHAT, WHY AND HOW of investors
- Each and every information is important and can generate discussion
further
Preparation of Business Plan

 Cover Sheet
 Executive Summary
 Table of Contents

1) Statement of Purpose
2) Company History/ Details about Venture
3) Business Description
4) Products and Services
Preparation of Business Plan

5) Market Analysis
a. Customers
b. Competition
c. Marketing Strategy
6) Management
7) Operations
8) Financial Plan
9) Appendices
Preparation of Business Plan
Cover Page
 Identity information
 The words “Business Plan”

 business name

 Company logo

 Address

 Telephone number

 Fax Number

 Email Address

 Web Address (URL)

 Submission date
 Purpose
 Should look attractive
Preparation of Business Plan
Executive Summary
Most important part of Business Plan
 30-second test
 Concise explanation
 Venture objectives

 Market prospects

 Financial forecasts

 Sources and uses

 SHOULD BE WRITTEN LAST TO AVOID MISMATCH

Preparation of Business Plan
Table of Contents

 Include page numbers

 List of headings
 Major

 Subsections

 Same font!
Preparation of Business Plan
Statement of Purpose
 The business plan’s objectives - purpose of taking fund or approaching VC
 DESCRIBE WHAT VENTURE WHANTS TO CREATE AND HOW THE FUNDS
WILL BE UTILISED TO ATTAIN THE PURPOSE

 Should outline purpose of financing arrangement requested

 How much fund is actually needed
 How the fund will be utilized
 What asset will be generated in the Venture
 How investment will be beneficial to business
 What returns are expected out of it
 Tenure for which company will be under growth phase
 How financing will be structured
Preparation of Business Plan
Company History
 Basic product currently dealing into
 Names of principals and brief background on each
 Legalities: business type, Venture legal format
 Company location
 Number of employees as on date
 Probable or existing Customer highlights
 Your niche and unique qualities/ technology which will drive growth
 Strategic alliances ( for product or services or technology)

Preparation of Business Plan
Business Description
 Mission Statement – Operational and financial
 Basic product or service description (present and future)
 New, takeover, expansion, franchise
 General strategy plan to drive business
 Business Modal
 Planned strategic alliances
 Company milestones as on date and after 3 years (business formation,
opening date, hiring employees, launching product, begin Operation
,Achieving revenue levels/ growth)
Preparation of Business Plan
Products and Services

 Detailed description of products or services

 Current stage of development of product: in-process, prototypes, samples
 Patents or trademarks, legal contracts, licensing agreements, regulations,
certifications
 Uniqueness - How product is different then other product
 Competitive advantage of product
 “The Brochure Section”- Attahchment
Preparation of Business Plan
Market Analysis
 Industry analysis
 Customers: individual, business entity
 Competition
 Marketing Strategy
 Cite Sources from where information is taken or trend details is taken

 Industry Analysis
 Industry in India- information, trends
 Local industry information, trends
 Social, economic, legal, technological issues in Industry
 Justify Opportunity for the product
Preparation of Business Plan
Market Analysis
 Customer Analysis
 Individual customer demographics
 Location, age, gender, occupation
 Ethnic group, lifestyle, education, income
 Business customer demographics
 Sector, location, structure
 Sales level, distribution classification, number of employees
Preparation of Business Plan
Market Analysis
 Competition
 Who are the competitors – If you say no competition then be ready for grilling
 Why your company/product/services are superior
 Similar and dissimilar
 SWOT (strengths, weaknesses, opportunities, threats)
 Advertising- as a tool to reduce competition-
 Eye on the future ( Currently no competitor, but can be competitor at future date)
 Competitive grid and explanation (Pricing comparison, product comparison, customer
comparison)
Preparation of Business Plan
Market Analysis

 Marketing Strategy
 How Venture will Obtain a good share of the entire marketplace
 Product: sellable aspects (uniqueness, Age factor, Location factor, brand
image, Utility)
 Pricing: Initial phase low pricing- creation of habit- then increase

 Placement – timing – right market

 Promotion – Mouth publicity- paper- media- Internet- road show- event

Preparation of Business Plan
Market Analysis

 Marketing Strategy
 How Venture will Obtain a good share of the entire marketplace
 Product: sellable aspects (uniqueness, Age factor, Location factor, brand
image, Utility)
 Pricing: Initial phase low pricing- creation of habit- then increase

 Placement – timing – right market

 Promotion – Mouth publicity- paper- media- Internet- road show- event

Preparation of Business Plan
Management

 Job descriptions of the decision makers

 “I do everything!”- Never tell the same
 Compensation, benefits – ESOPS- Dilution of Equity
 Contribution and background as leverage to perform
 Advisory board
Preparation of Business Plan
Production/ Operations
 Location of Plant or Operational store or website
 Facilities needs for Production – Water, electricity, server, security system
etc.
 Space planning for operation considering further expansion
 Manpower needed for Production or sub contracting (Stagewise)
 Logistics arrangement
 Environmental and other issues
 Licenses availed and to be applied for doing business
 Purchasing policy, quality control program, inventory control system,
production cost breakdown
Preparation of Business Plan
Financial Plan
 Should define initial start up cost
 What is Cost Post start up and when the funds are required
 Estimate of capital expenses with supporting
 Estimate of working capital requirement under the phase manner
 Fund Required at what point of time
 Way of funding- Equity, debt or Income note or Subsidy or Govt. Grant
 Factoring way of funding and it’s cost during working out estimated
financial pojection
 Expected Cash flow
 Break Even years
 ROI working
Preparation of Business Plan
Appendices
 Supplemental materials
 Resumes of management team
 Past financials if available
 Interim income statement and balance sheet
 Copies of potential contracts
 Financial Projections
 Brochure of the product
 Prototype description details
 Details about technology with more specification
 Schedule of implementation
 Letters of reference
Preparation of Business Plan
Appendices
 Supplemental materials
 Resumes of management team
 Past financials if available
 Interim income statement and balance sheet
 Copies of potential contracts
 Financial Projections
 Brochure of the product
 Prototype description details
 Details about technology with more specification
 Schedule of implementation
 Letters of reference
Summary

planning
Term Sheet
 Term sheet plays important role in venture capital finance
 Term sheet is a major document which describes broader terms and
conditions which are finalised at the end of negotiation
 Term sheet can be called as MOU or Letter of Intent
 Term should not be non binding to creat relevence
 TS gives clarity of terms and operation and intention of both
 Formal Agreements executed post term sheet depending up on method of
funding ( for equity- share holders agreement, share purchase agreement
etc )
 Should keep it confidencial before formal agreement executed
Term Sheet
Points to be considered while drafting term sheet
 Purpose of term sheet
 Amount and Type of Investment
 Amount of Investment
 Amount of investment based on period
 Amount of investment based on condition

 Type of security issue against investment

 Equity shares – should classify class of shares if differential voting rights are given
 Preference shares
 Share warrant
 Debenture
 Or combination of above

 Security mechanisms- Guarantee, pledge of shares mortgage of asset

 Milestones- on whose achiement VC will fund further or right to call and put
excercises
Term Sheet
 Investors rights
 Conversion Right – for mandatory conversion –trigger of event descr.
 Anti dilution Right- Clause is added to secure that company will not
issue new shares at price lower then price at which share issued to
investors. If issuing at discount then current investor should be
approached first.
 Redemption/ Repurchase Right- Term sheet should indicate at what
time redemption or repurchase can be exercise.
 Right upon Liquidation and dividend
 Right of voting and Board representation- differential voting right-
1 share holder has 2 vote in AGM- event when differential voting
right will be effective?
 Right of first refusal/co-sale- Right to acquire new shares
 Right to get information
Term Sheet

Other General Points to be covered

 Right of IPR- who will hold in case venture not materialised
 Non Competition agreement
 Agreement for taking over employees
 Representation and Warranties
 Default- whether grace period should allow or not ? Consequences of
default
 Conditions to closing – conditions to be fulfilled before closing final
agreement ( like statutory approval, financial audit, due- diligence report
by expert , pre clinical report in Parma company etc)
 Signature and parties
Thank You