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 who are outside LetsVenture , to participate in the transaction by inviting them on the platform.
- Personal Concierge: LetsVenture will allocate one analyst during the deal who will work with the Lead 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 Share Holding Agreements (SHAs)
- 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: All PR release made on the funding closure will include the Lead investor quote.
- Lead Carry: LetsVenture allows the Lead Investor to charge 0-15% carry through the Lead Syndicate.
- Business Model: LetsVenture charges a fee to the Startup based on the funds being raised on the platform and upto 5% carry from Investors.
How do Syndicates work on LetsVenture?
There are 2 ways in which syndicated deals work on LetsVenture:
- Featured deals - In 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.
- 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 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 atleast 10-15% of the round
- Work with the startup to set the valuation and terms of investment
- Represent the investor syndicate during fundraise (pitch on behalf of the startup, review term sheet, answer investor queries)
- Based on the board seat allocated, sit on the board of the Startup or as an observer.
- Work with the Startup on the next rounds of funding
Why should I sign up on LetsVenture?
Started in 2013, LetsVenture.com is today India's most trusted platform for Angel Investing with access to highly curated and personalised deal flow from India and beyond. We have 3809 investors registered on our online platform. In past 5 years, LetsVenture has enabled 170+ transactions with more than USD 70M infused into Startups like Innov8, DailyNinja, YourDost, Bobble App, MyUpchar, TestBook, Ayurveda Experience, Ketto, Adpushup, Little Black Book, Drivezy, Porter, Wishberry etc.
Here are the benefits for Angels -
- Access highly Curated Startups - LetsVenture curation process is a complex 3 tiered process. There is the first level of platform ranking based on our proprietary rating system, followed by the LV team conversation with the founders, and then crowd curation by the angels on the platform. All this put together ensures that as an investor you have access to the best, curated deal flow.
- Get Personalised & Matchmade Deals - Fine tune your investment preferences and we automatically send startups matchmade for you. Our ML based Recommendation engine also learns from your online behavior and shows you right startups.
- Search & Follow ‘Hot Deals’ - Power search through 58 sectors and over 500+ actively fundraising Startups. You can also browse through our Startup collections to find trending deals and more.
- Co-Invest - with the best lead investors as part of their syndicate, or with experienced angels.
- Connect with Founders instantly - our realtime chat platform helps you connect with founders quickly and engage in meaningful discussions privately and securely.
- Manage your Portfolio - with our quarterly Startup reporting and portfolio tracking.
- One point Contact - Relationship Manager is assigned to you as soon as you register on the platform and he/she is your single point of contact for queries, discussions going forward.
Are you a lead investor?
- Create your Syndicate - work with our team to create your Lead syndicate profile and get access to a large and active investor community
- Aggregate backers for your Lead Syndicate and close deals super-fast
- Manage your Syndicate - track commitments from backers in real-time, send personalised messages and close the deal quickly
- Personal Concierge - a dedicated LetsVenture analyst will help you manage your syndicate from zero to closure
- Avail Lead Incentive - receive 5-15% carry when you lead deals on LetsVenture.
- Easy Paperwork - LetsVenture will provide you complete support from commitment-to-closure (due diligence, term sheet, SHA and share allocation).
Are you an early stage fund?
- Build your Brand - create your profile and attract high quality startups
- Co-Invest with Marquee Investors
- Syndicate with investors who are aligned to your vision or bring expertise
- Manage your portfolio
- Centralise your investment reporting & progress
Are you a family office ?
Register on LV Titans, a private platform created for you to get exclusive access to growth stage startups. Visit the Website (http://lvtitans.com) to get started.
How does LetsVenture work with Investors?
We break down the engagement with LetsVenture into 4 aspects:
- Pre-Commitment: Here you can login to the platform or the mobile app and browse startups. The startups are personalised to your profile. If a startup is of interest to you, you can connect to the founder, your RM at LV or to the lead investor. Based on the information available to you, you can commit on the platform.
- During commitment period: As the startups continues to syndicate, you will get updates on the deal progress. Once 80% of commitments come in, LetsVenture in partnership with the Lead Investor and founder initiate due diligence on legal and financial aspects of the startup. During this phase, you get weekly updates on the progress. Call for money is done once the DD is successfully completed and accepted by the Lead Investor.
- Post Commitment: LetsVenture pools the investments through a vehicle registered with SEBI (LV Angel Fund) so that all investors come on the cap-table of the startup as a single entity. LetsVenture will do the complete deal documentation (legal paperwork).
- Post investment: LetsVenture will provide a quarterly progress Report containing important business metrics, Financial health for all your portfolio Startups. We will also arrange for a quarterly conference call with your Portfolio Startups. We will also provide you with valuation report of your investments on an annual basis.
Is there any eligibility criteria for Angel Investors to sign up on LetsVenture?
According to SEBI Angel Fund Regulations, "Angel investor" means any person who proposes to invest in an angel fund and satisfies one of the following conditions, namely,
- an individual investor who has net tangible assets of at least two crore rupees excluding value of his principal residence, and who
- has early stage investment experience (it means prior experience in investing in start-up or emerging or early-stage ventures, or
- has experience as a serial entrepreneur (it means a person who has promoted or co-promoted more than one start-up venture, or
- is a senior management professional with at least ten years of experience.
- a body corporate with a net worth of at least ten crore rupees
- an AIF registered under these regulations or a VCF registered under the SEBI (Venture Capital Funds) Regulations, 1996.
An Angel Investor must invest a minimum of 25 lakhs INR over five years in the startups he/she likes, through the Angel Fund.
Additionally LetsVenture equires that the Angel Investor is aware of the risks of investing in Startups as an Asset class.
When you decide to invest, you will be required to complete the one time KYC (Know Your Customer) that requires your address and identity proof as per SEBI requirements.
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?
- There is a one time fee of 25k INR to sign up to the Angel Fund
- 1% of the commitment is charged every time you commit through the angel fund (INR 5k being the minimum)
- LetsVenture charges a 5% carry on exit.
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 as per SEBI regulations for Angel Fund (AIF) 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.
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.
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?
There is no such restriction for NRI investor when investing through our SEBI registered AIF (LV Angel Fund).
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.
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.
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.
Why should I join a Syndicate?
By joining a Syndicate, you leverage the experience of the Lead Investor and get early access to the Lead Investors deals. This is ideal for a new angel investor or an investor not having enough time to do his own due diligence on the Startup, and work with founders going forward to make the venture successful.
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 requested by the platform. We allow the Lead Investor to have the option to accept or reject backers. If you are accepted as a backer, you will get notified when a new deal opens though that Syndicate.
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 carry, min commitment per backer and time-limit for commitments when launching a deal through his Syndicate. Lead carry can vary between 0-15% and you can see it on the syndicate page when the deal is launched there.
What is the role of a Lead Investor in a Syndicate
Lead Investors is usually an experienced and well known Angel Investor in the ecosystem. He/She attracts high quality deals because of his/her high brand value. He/She will do thorough business diligence to select the best Startup, negotiate the valuation and termsheet for the Startup, invest maybe 10-20% of the round himself/herself before launching it through his/her syndicate. The Lead will also pitch along with the Founder during pitching sessions and answer questions to interested Angel investors. After the round is completed, the Lead will most likely take a board seat and represent all other investors’ interests on the board of the Startup. The Lead will also mentor/advise the Startup during its formative years, coordinate quarterly reporting to all investors with LV help, ensure good governance and compliance, and also help with the future fundraise for the Startup. During any exit opportunity, he/she will also negotiate with the incoming investor representing the rights of all the other angel investors.
How is this different than the current Featured Deals of LetsVenture?
The Lead Syndicate model is an invite only feature at LetsVenture led by active seasoned Lead investors. The deals here are brought to LetsVenture and championed by the Lead.
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.
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.