Why should I have a Lead Syndicate profile on LetsVenture?
By creating a Lead Syndicate profile on LetsVenture, you can aggregate backers and build visibility on corpus available for the deals you Lead. You get the following advantages:
- Personalized Platform: LetsVenture allows you to select the investors you want to invite to join the syndicate. You can also invite your own social circle, outside the platform, to participate on the platform, by inviting them on the platform.
- Personal Concierge: LetsVenture will allocate one analyst resource during the deal opening timeline who will work with the Lead team to create the investment thesis for the deal, which can be shared to all prospective investors.
- Program Management Support: LetsVenture team will provide complete support in program management of the investor communication during the deal. This includes -
- Standardized term sheet templates, which offers process efficiency
- Support with brief on term sheet and SHA
- Co-ordination for term sheet reviews, SHA signatures, PoA signatures (if applicable), share certificate issue.
- Any additional backend support needed for round closure
- Angel Reputation Management: LetsVenture is working with different PR agencies and will be launching a “Lead Investor Showcase” Series. We will feature our lead investors as part of this. All PR release made on the funding closure will include the Lead investor quote.
- Lead Incentive: LetsVenture term sheet enables the lead incentive OR carry model to be discussed and agreed between the investor and the entrepreneur.
- Business Model: Contact email@example.com to get the details.
How do Syndicates work on LetsVenture?
There are 2 ways in which syndicated deals work on LetsVenture:
- Featured deals - A Featured deal, the Startup profile is visible to all the investors on the platform. This method is adopted to help close the round quickly. While any investor interested in the round can invest, the Lead/Startup has the right to choose the final set of investors based on the alignment in the vision.
- Stealth/Private deals - In a private deal, the Startup profile is not visible to all the investors on the platform. Only those investors who -have been provided access to the startup can view the profile. This method is used when either the Startup or the lead want to socialise the deal with strategic investors or with the lead’s co-investor group.
What does being a Lead Investor mean?
A lead Investor could be an individual or a group of 2 – 3 investors (who could co-lead the round). As a Lead Investor, the following is expected:
- Invest at least 10-15% of the round
- Work with the startup to set the valuation and terms of investment
- Represent the investor syndicate during fundraising (pitch on behalf of the startup, review term sheet, answer investor questions)
- When number of investors is greater than 5, Lead Investor is provided with the PoA (Power of Attorney) for all the investors in the round.
- Based on the board seat allocated, sit on the board of the Startup
- Work with the Startup on the advisory and next rounds of funding
Why should I sign up on LetsVenture?
LetsVenture is India’s most trusted platform for Angel Investors and Venture Funds. You can discover and connect with curated startups and participate in syndicates online.
- Connect to curated Startups: As an investor, connect to curated startups in a safe, private environment
- Lead deals, Participate in Syndicates: Take advantage of the Lead Incentive Model on LetsVenture to Lead deals. Participate in featured syndicates on the platform along with other angel investors.
- Commitment to Closure (C2C): LetsVenture offers closure on commitments made on the platform via our C2C package (complete financial and legal due diligence, including paper work for term sheet and SHA)
Is there any eligibility criteria for Angel Investors to sign up on LetsVenture?
- You need to be aware of the risks involved with the investment commitment.
- You should look at making 8 - 10 investments in 2 - 3 years with a total commitment of 40 to 75 lakhs INR.
- Read the blog post for more details.
How does LetsVenture work for Investors?
- Investors request invite to join the platform.
- LetsVenture Investor Relations team will call you and then onboard you onto the platform.
- You get access to the top startup profiles, syndicate alerts and trending startups.
- Connect and invest in startups through the platform along with seamless paperwork.
How can Investors register on LetsVenture?
Investors can fill up the join
form on LetsVenture.com or get referred by any other Investor (already on the platform). In both cases, our Investor Relations team will review and approve your credentials before providing you the login for the platform.
How much fee does LetsVenture charge from Investors?
We have two annual subscription options for investors - 24,000/year and 40,000/year. Please contact the LetsVenture team for further details.
How does LetsVenture do Investor accreditation?
There is no formal accreditation process for investors in India. However, LetsVenture does its own verification of credentials and identity before onboarding any investor on the Platform.
Which all information is required for my Investor profile?
- Personal information - Linkedin profile URL, photo, designation, contact number etc.
- Investment preferences - Investment budget, preferred sectors for investment, investment thesis.
- Investment profiles - Financial information required for the paperwork.
- Startup portfolio - List of Startups showcasing your investments.
- Domain expertise - Sectors of expertise where you can help Startups.
Who is a Non-Resident Indian?
A Non-Resident Indian (“NRI”) is a person who is resident outside India but is a citizen of India.
Can NRI invest in Indian companies? Can a foreign national invest in Indian companies?
NRIs and foreign nationals are permitted to invest in an Indian Company in accordance with the existing Foreign Direct Investment Policy of India.
As an NRI, what is the best way to transfer money to India?
As an NRI the investment amount can be remitted by the NRI from the bank account maintained in the country of residence or the NRO/NRE/FCNR accounts maintained in India.
The investments can be made in the following manner:
- On repatriation basis – The investments made on a repatriation basis can be made from the bank account maintained in the country of residence or the NRE/FCNR accounts. This investment is required to be reported to RBI as an investment made under the FDI route by way of filing a Form FC-GPR. The proceeds from the investments made under this route are freely repatriable.
- On non-repatriation basis - The investments made on a non- repatriation basis can be made from the NRO/NRE/FCNR accounts. This investment is not required to be reported to RBI as the same does not fall within the FDI route. The proceeds received from this investment is not freely repatriable.
It is recommended that the investments be made on a repatriation basis.
If the Startup is registered in US with engineering offices in India, will this be different?
In the event the investment is proposed to be made in a company registered in the USA by NRIs or Foreign Nationals, the investments will have to be made in accordance with the laws of USA. The laws of India will have no bearing on such investments.
What are the bank account facilities that are available to NRIs in India?
- Foreign Currency (Non-Resident) Account (Banks) Scheme - FCNR(B) Account
- Non-Resident (External) Rupee Account Scheme - NRE Account
- Non-Resident Ordinary Rupee Account Scheme - NRO Account
Which sectors can an NRI invest in?
As per the extant Consolidated FDI Policy, which is amended by the Government from time to time, FDI is prohibited in (“Prohibited Sectors”):
- Lottery Business including Government /private lottery, online lotteries, etc.
- Gambling and Betting including casinos etc.
- Chit funds
- Nidhi company
- Trading in Transferable Development Rights (TDRs)
- Real Estate Business or Construction of Farm Houses
- Manufacturing of Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes
- Activities / sectors not open to private sector investment e.g. Atomic Energy and Railway Transport (other than Mass Rapid Transport Systems)
Apart from the Prohibited Sectors, NRIs can invest in sectors that are identified and regulated in the Consolidated FDI Policy, subject to the restrictions stated therein (“Regulated Sectors”).
FDI is permitted upto 100% under the automatic route in sectors which are not Prohibited Sectors or Regulated Sectors. See the existing FDI Policy document
for your reference. Please refer pages 39 onwards for sectors regulated under the FDI Policy. Do note that the FDI Policy is amended from time to time and the attached document cannot be relied on a continuous basis.
Can NRIs invest in India under the Foreign Direct Investment Scheme?
An NRI can invest in a number of entities in India under the extant Foreign Direct Investment Scheme (FDI Scheme). The list of entities would include, listed and unlisted companies, Venture Capital Fund (VCF), a Partnership/Proprietary Firm and in a Limited Liability Partnership (LLP).
What entry routes can an NRI take for investment under the FDI Scheme?
An NRI can invest under the FDI Scheme through the following routes:
- Automatic Route: In all activities/sectors as specified in the consolidated FDI Policy, issued by the Government of India from time to time
- Government Route: In all activities not covered under the automatic route requires prior approval.
Under the Automatic Route, the NRI or the entity taking FDI does not require any approval from Government of India for the investment. Under the Government Route, prior approval of the Government of India is required. Proposals for foreign investment under Government route are considered by the Foreign Investment Protection Board (FIPB).
Can an NRI invest in a domestic VCF under the FDI Scheme?
Yes. An NRI can invest on a domestic VCF under the FDI Scheme, subject to the following:
- If a domestic VCF is set up as a trust, an NRI can invest in such domestic VCF subject to approval of the FIPB
- If a domestic VCF is set-up as an incorporated company under the Companies Act, then an NRI can invest in such domestic VCF under the automatic route of FDI Scheme.
Can an NRI invest in a Partnership Firm/Proprietary Concern under the FDI Scheme?
Yes. An NRI can invest in the capital of a firm or a proprietary concern in India under the FDI Scheme, subject to the following:
- The amount is invested through inward remittance or out of NRE/FCNR(B)/NRO Account
- The firm or proprietary concern is not engaged in any agricultural/plantation or real estate business or print media sector.
- Amount invested shall not be eligible for repatriation outside India, except with the prior approval of RBI.
Can an NRI invest in a Trust?
No. An NRI cannot invest in a Trust. The only exception is if a VCF is set up as a Trust, then the NRI can invest in the VCF subject to the approval of FIPB.
Can an NRI invest in an LLP?
Yes. An NRI can invest in an LLP subject to the following:
- An NRI can invest in LLP’s operating in sectors where 100% FDI is allowed through the automatic route and there are no FDI linked performance conditions, subject to the approval of the FIPB
- Foreign Capital participation in LLPs will be allowed only by way of cash consideration, received by inward remittance, through normal banking channels or through NRE/FCNR Accounts.
Can an NRI invest in an Indian company under the FDI Scheme?
Yes. An NRI can invest in shares/convertible debentures of an Indian company through:
- A remittance from its bank account outside India (“Foreign Bank Account”)
- A remittance from its NRE/FCNR(B) Accounts
What instruments can be issued by an Indian company to NRIs under the FDI Scheme?
Investment into an Indian company from a person resident outside India (including NRIs) will only be considered as FDI, if the investment is made into the following instruments (collectively FDI Instruments):
- Equity shares
- Fully and mandatorily convertible preference shares
- Fully and mandatorily convertible debentures
At what price can the FDI Instruments be issued to NRIs?
The price at which the FDI Instruments can be issued to NRIs shall not be less than the following (Pricing Guidelines):
- The price worked out in accordance with the SEBI guidelines, as applicable, where the shares of the company is listed on any recognised stock exchange in India
- The fair valuation of shares done by a SEBI registered Category - I Merchant Banker or a Chartered Accountant as per the discounted free cash flow method (DCF Valuation), where the shares of the company is not listed on any recognised stock exchange in India.
- The price as applicable to transfer of shares from resident to non-resident as per the pricing guidelines laid down by RBI from time to time, where the issue of shares is on preferential allotment.
However, when NRIs subscribe to the Memorandum of Association of an Indian company as its initial subscriber, then such investments may be made at face value.
Are there any restrictions with respect to the convertible instruments that are issued to NRIs under the FDI Scheme?
Yes. The FDI policy provides that the price/ conversion formula of FDI Instruments should be determined upfront at the time of issue of the instruments. The price at the time of conversion should not in any case be lower than the fair value worked out, at the time of issuance of such instruments, in accordance with the extant FEMA regulations i.e. the Discounted Cash Flow Method (DCF) of valuation for the unlisted companies and valuation in terms of SEBI (Issue of Capital and Disclosure Requirements) Regulations, for listed companies.
What are the filings that need to be undertaken by a Company if it issues FDI Instruments to an NRI ?
The filings that need to be undertaken would depend upon whether an NRI invests in FDI Instruments either through the FDI Scheme or the Non-Repatriation Scheme.
- Non-Repatriation Scheme: If an NRI invests in FDI Instruments through a Non-Repatriation Scheme using its NRO/NRE/FCNR(B) Accounts, then the investment would be treated as a domestic transaction and no reporting will have to be made by the investee company to RBI.
- FDI Scheme: If an NRI purchases FDI Instruments in an Indian company through funds that are available in its NRE/FCNR(B) Account or its Foreign Bank Account under the FDI Scheme, then the purchase would be treated as FDI and the be subject to the following:
- The FDI Instruments will have to be issued within 180 days from the date of the receipt of the investment amount by the Company.
- The Indian company receiving investments from an NRI, will through its Authorised Dealer, have to report the amount of investment that it has received within 30 days of the receipt of the investment amount with the Regional Office of RBI.
- The Company will need to file the Form FC-GPR with RBI within 30 days of the allotment of the FDI Instruments to the NRI.
Can an NRI freely transfer the FDI Instruments that it had purchased under the FDI Scheme?
- Transfer of FDI Instruments by NRI to Non-Residents: An NRI can transfer the FDI Instruments to Non-Residents. A transfer of FDI Instruments by an NRI to Non-Residents will require the prior approval of RBI.
- Transfer of FDI Instruments by NRIs to NRIs: An NRI can transfer the FDI Instruments to other NRI’s. A transfer of FDI Instruments by an NRI to NRI will not require the prior approval of RBI.
- Transfer of FDI Instruments by NRIs to Residents: An NRI can transfer the FDI Instruments to Residents without the prior approval of RBI, subject to the sale of the FDI Instruments being in consonance with pricing guidelines as stated in point 11 above.
Post the sale of its FDI Instruments, can an NRI repatriate the sale proceeds outside of India?
- Purchase of FDI Instruments through Non-Repatriation Scheme: If the NRI has purchased the FDI Instruments through the Non-Repatriation Scheme, then the sale proceeds cannot be repatriated outside of India.
- Purchase of shares through Foreign Bank Account or NRE/FCNR(B) Account under FDI Scheme and filing of Form FC-GPR: If the NRI has purchased the FDI Instruments through its NRE/FCNR(B) Account or through its Foreign Bank Account and the investment in the FDI Instruments has been reported through the filing of Form FC-GPR, then the sale proceeds can be repatriated outside of India.
What are Syndicates?
Syndicates allow angel investors to join the investing circle of a Lead Investor, and solicit access to deals being led by him. Once you join the Syndicate, you become among the first ones to know about a new deal that is being launched by the Syndicate. For example, if you back Sanjay’s Syndicate, anytime Sanjay starts a new deal, you will be informed about the deal and can participate in the deal before anyone else. [Note that Sanjay may also choose to share the deal only with a select list of backers first, based on his discretion].
As a "backer" of a Lead's Syndicate you can choose to Auto-Commit or evaluate each deal in the specified time limit before committing.
Why should I join a Syndicate?
By joining a Syndicate, you can piggyback on the experience of the Lead Investor and also become the first ones to be notified about a new deal. This is -ideal for a new angel investor or an investor not having enough time to do his own due diligence with the Startup founders.
How can I join a Syndicate?
When you visit the Syndicate page, click the button “Join the Syndicate” in the sidebar and fill up the information in the next few dialogs to complete the process of joining the Syndicate. After that you will get notified when any new deal opens though that Syndicate. Note that the Lead may also choose to share the deal only with a select list of backers first, based on his discretion.
What is Auto-Commit option in a Syndicate?
Auto-Commit is a way of securing your participation in the deal as soon as the deal opens up and before any other investor reviews and manually commits into the deal. You will however have 7 days to review if you want to opt-out of the deal - Opting out needs to be justified to the Lead and if it is without reason, LetsVenture will take suitable action.
What are the terms of investing through a Syndicate?
The terms of investment may vary from deal to deal when you invest through a Syndicate. The Lead Investor will announce the terms - Lead Incentive, method of availing the Lead Incentive, min commitment per backer and time-limit for commitments when launching a deal through his Syndicate. A typical Lead Incentive value is shown on the Syndicate profile page.
How is this different than the current Featured Deals of LetsVenture?
Featured Deals on LetsVenture are the deals that are selected by LetsVenture team to be featured. These deals could be either through the Lead Syndicates program or regular program of any other lead investor leading the deal.
How do I find the best Startups to invest in?
LetsVenture Featured Syndicates is a good way to invest in high quality startups. These deals are hard curated by our own team and also backed by prominent Angels from the ecosystem. We also have specific matchmaking algorithms and you will receive startup introductions and syndicate alerts using our matchmaking algorithm based on your investment preferences among other criteria.
What is the best way to judge and find a high-growth Startup?
LetsVenture featured syndicate is a good way to invest in high quality startups. Including this, your personal investing experience and advice from experiences angel investors can help you find the quality startups.
Is there a maximum or minimum amount of investment per Investor? Can such amount be determined by a Startup?
Minimum ticket size for each Startup investment is INR 5 Lakhs only. However Startup has the flexibility to set a higher minimum ticket size based on the round size and his/her preference. There is no maximum ticket size limitation per investment.
Who is a Lead Investor? What are the responsibilities of a Lead Investor?
A Lead investor is someone who is willing to step in and don the mantle of the captain of the investor syndicate. The Lead investor should ideally have engaged with the startup for sometime to understand the business, and see how he can support the entrepreneur. Read in detail about the responsibilities here
What are the incentives LetsVenture provides for a Lead Investor?
LetsVenture provides very good incentives to the Lead Investor (in terms of advisory equity). The equity could be anywhere between 2-4% depending on the discussion between the Startup and the Lead Investor. We are also in the process of providing a carry incentive the the Lead Investor.
How can I become a Lead Investor?
Any angel investor participating in the current round can become a lead investor. You can get in touch with the entrepreneur himself to lead any particular deal or connect with the Letsventure deals team - firstname.lastname@example.org. Find out here
the roles and responsibilities of a lead investor during the funding round and afterwards.
How protected are my investments?
LetsVenture’s partners do all the financial and legal due-diligence for the startups before taking in any money from the investor. A Due Diligence report is issued prior to the signing of the Shareholder Agreement. We also rely on the social proofs and background of the startup and team members. Besides this, all investments on the platform have the legal paperwork to protect your investment.
What is the guarantee or probability of my investment giving me returns and in what time horizon?
Your investment is based solely on your own judgement, knowing the risks involved in this dynamic marketplace. We do not guarantee on the investment return as it is dependent upon the market scenario and startup execution.
How liquid are these and do you facilitate secondary share sale as well of my investment and portfolio?
Angel investing is not a liquid asset until the startup gets into future rounds of funding (Series A/ Series B, during which the angel investor can make potential exit). The timeline for the same depends on each startup. As of now, LetsVenture does not facilitate secondary share sale but we do have plans to introduce this in the future.
In the event the Startup fails, is there a possibility where the founders will be personally liable to the investors?
The founders shall be personally liable to the investors to such extent as may be documented in the terms and conditions of the respective investment agreements.
Who can invest in startups in India?
Indian residents can invest in any startup in India. Non- resident individuals and companies have to comply with FDI rules and regulations. See the NRI section
for more details.
How many investors can invest in a single Startup?
The total number of investors which can invest at any given point in time should not exceed 200. Further, the total number of shareholders in a private limited company, cannot be less than 2 and more than 200.
Will a Startup issue shares directly to the investors?
Yes. The shares may also be issued to nominee(s) of the investors if the same is agreeable with the start-up.
Will the founders and investors be entitled to any voting rights?
The voting rights for investors depends on the share holder agreement. In most cases, all investors do have the voting right but only the lead investor will get the board seat.