Case Study on Fundraising

The Situation

Arjun’s B2B software business was growing, and an overseas angel investor was ready to commit a seed cheque. It should have been straightforward. Instead, his books mixed founder funding with personal expenses, he had no financial model, his cap table had never been formally set out, and he held a term sheet with clauses he did not fully understand. He came to us a few weeks before the intended close, concerned the deal might not survive due diligence — and unclear how a foreign investor could lawfully invest in an Indian company.

What we found

• The books were not investor-ready: mixed expenses, undocumented founder funding and unclear revenue recognition.
• There was no financial model to show how the funds would be used and what they would deliver.
• No clarity on the raise itself — how much to raise, at what valuation, or the dilution that would follow.
• The cap table was informal, with equity, ESOPs and dilution undefined.
• Term-sheet clauses were not understood: liquidation preference, anti-dilution, board rights and founder vesting.
• Statutory compliance gaps (GST, TDS, ROC) sat waiting to surface in diligence.
• IP and key contracts were not properly assigned to the company, and no founders’ or shareholders’ framework existed.
• A foreign investor brought FEMA pricing rules and RBI reporting (FC-GPR) into scope.
• There was no organised data room — documentation was scattered and runway was not clearly understood.

What we did

• Restructured the financials into a form able to withstand diligence, with founder contributions documented.
• Built a credible financial model and projections tied to a defined use of funds, raise size and valuation.
• Formalised the cap table and established an ESOP framework for future hires.
• Closed the statutory gaps and assigned IP and contracts to the company, and put a founders’ framework in place.
• Reviewed the term sheet in plain terms, identified the clauses worth negotiating, and assembled a clean data room.
• Set out the cross-border requirements — FEMA pricing, valuation support and FC-GPR reporting.

The Result

• The financials, model, cap table and data room are in order, and the company is prepared for diligence.
• Several term-sheet points are identified for negotiation, with discussions underway.
• The cross-border structuring is mapped, so the investment can complete in full compliance with RBI and FEMA.
• The round is progressing towards close on terms clearer and more balanced than those first presented.

The Takeaway

Investors back numbers they can rely on and a founder who understands them. Most rounds are tested in due diligence rather than in the pitch. We prepare founders to be investor-ready — clean books, a credible model, a clear cap table and compliant structuring — so the round can close.

If you are raising, or expect to, the time to put your numbers in order is well before the term sheet arrives.

Some names and identifying details in this case study have been changed to protect client confidentiality.