APOHANTM CORPORATE CONSULTANTS PVT. LTD.

APOHANTM

Where Businesses Realize Their Dreams!!!

Day 3: Deal Success

Equity Funding for
Business Growth & Financial Turnaround- Success
Organizer: Maratha Chamber of Commerce, Industry & Agriculture, Pune

A genuine business motivation delivers profitability, returns, stability, growth and sustainability!

8th, 9th & 10th July ,2020| 11.00 a.m. to 12.45 p.m.
P re s e n t e d by : A r u n J o s h i
E-mail: arun.joshi@apohanconsultants.com
Ph. +91 9810481325
We b s i t e w w w. a p o h a n c o n s u l t a n t s . c o m

APOHAN CORPORATE CONSULTANTS PRIVATE LIMITED

7/12/2020 1
 APOHANTM

Section 1:
Important Aspect in
Business Funding
Equity, Debt, Grants & Schemes, Discipline Actions, Encashments. Customers, Suppliers, Cost Cutting,
Breathing Easy, Foreign Funds, Corporate Issues, Restructuring, M&a
 Business Funding Aspects (1/3) APOHANTM

▪ Following is the list of the aspects or questions of the key considerations in the financing contracts:
1. Basis of eligibility: Whether the investment opportunity is analyzed on the basis of standard institutional rules or on
financial merit of the business; does the investor have ability & mechanism to understand business?
2. Rigidity of process: Whether the investor is reasonable and flexible enough to accommodate unimportant shortcomings
in the processing of application;
3. Rigidity of contract: Whether the investor is open for negotiation of the terms and conditions in the investment contract
or are the conditions very rigid;
4. Return: Whether or not a certain minimum guaranteed return, such as interest, is promised by the recipient;
5. Guaranteed return: Whether the rate of return to the investor is fixed or it is dependent on business performance;
whether there is an upper limit on profit shared;
6. Repayment: Whether the recipient business is required to repay the capital amount or not at all as in case of common
equity funding;
7. Time: What is the amount of time required for the disbursement of the funds from the first contact time or application
date;
8. Security: Whether the recipient requires to provide some property or asset as security at some ratio of the amount of
capital; what percentage of margin money is required;
9. Guarantee agreement: Whether the business is required to furnish one or more guarantees including other corporate or
personal guarantees;
7/12/2020 APOHAN CORPORATE CONSULTANTS 3
 Business Funding Aspects (2/3) APOHANTM

10. Cost: What is the one-time cost of raising the funds as a percentage of the amount raised;
11. Corruption: Is there corruption in the capital supplier institution?
12. Repayment flexibility: What are the flexibility is available in the repayment of the instalments of the original
amount and the returns;
13. Contract flexibility: Whether the investor is flexible to change the contract in due course of time looking at the
circumstances of the business;
14. Time flexibility: Whether the investor requires the business to be flexible in terms of expectations of capital
infusion timing?
15. Compliance: Whether the business requires to carry out a lot of statutory compliance activity to be eligible to
avail the capital;
16. Penalties: What are the various types of penalties in the financing contract;
17. Risk appetite: What is the risk appetite of the investor? Would he invest with known high risks? Unknown risks?
18. Performance security: Is the capital provider ready to take the entire risk of performance of the business? Or he
wants to secure some lower side?
19. Recourse: What is the financial recourse to the investor if there is incurable financial default, business failure,
insolvency, bankruptcy, etc.? Would it take away the control and ownership of the shareholders?
20. Willful default: What is the difference between treatment of willful default and performance related default;

7/12/2020 APOHAN CORPORATE CONSULTANTS 4

 Business Funding Aspects (3/3) APOHANTM

21. Duration: What is the duration for which the capital is provided;
22. Due diligence: What is the degree of due diligence at the time of sanction of amount;
23. Documentation: What is the documentation involved;
24. Discretion: Is there scope for individual discretion in the investment decision;
25. Amount: What is the amount that is being sanctioned vis-a-vis the requirement of the business;
26. Control: Whether there is dilution of control of the previous shareholders;
27. Ownership: Whether there is dilution of ownership of the previous shareholders;
28. Interference: Whether there is going to be interference in day-to-day operational management;
29. Expectation: What is the expected rate of return or the interest rate; whether it is normal, reasonable,
acceptable and achievable;
30. Synergies: Whether there are synergetic benefits of the association with the capital provider; Would the
financial expertise of the investor be useful for the business;
31. Instruments: How many variants of the instruments of funding are available;
32. Convertibility: Whether the instrument can be converted from one form to another form in due course of
time as per requirement;
33. Hardship: Would the investor appreciate a peculiar situation or a hardship of a business.

7/12/2020 APOHAN CORPORATE CONSULTANTS 5

 APOHANTM

Section 2:
High Level Context of M&A Deal
 M&A – Level of Decision Making APOHANTM

Persons/Entities Their Organizations

1) Promoters, shareholders
2) Chairman, Managing Director, CEO
3) Executive/non-executive directors
4) Independent directors
5) Resolution professionals
6) Heads of departments, CXOs
7) Lenders & investors
8) Trustees, nominees & guarantors
9) Key contractual clients / suppliers
10) Key decision makers & equivalent people
11) Mentors & influencers
1) Private/Public limited companies
2) Listed companies
3) MNCs, subsidiaries, branch offices
4) Limited liability partnerships
5) JVs, SPVs, Holding entities
6) Govt. department, PSUs
7) Proprietorships & Partnerships
8) Societies, trusts
9) AOPs, HUF, etc
10) Industrial associations
11) Investors

Who wants to achieve a success & for what type of legal entity has a lot of significance in
deciding the course of action.
 Life Cycle Stages of Business & M&A APOHANTM

M&A at different business cycle phase has different implication & objectives.
Following are the various stages of development of a business:
1. Pre-incorporation:
2. Proof of concept:
3. Before break-even:
4. After break-even:
5. Exponential growth phase:
6. Stable growth:
7. No growth:
8. Decline phase:
9. Revamping or refurbishment:
10. Business Turnaround:

7/12/2020 APOHAN CORPORATE CONSULTANTS 8

 Business Nature & M&A
Legal types
o Proprietorships
o Partnerships
o LLPs
o Private limited
companies
o Public limited
companies
o Listed companies
o Societies (Trusts, NGOs)
o Cooperative societies
o Government
o Multilateral agencies
The nature of engagement changes substantially depending upon the legal nature, required type
of investor & place in value chain.
APOHANTM
Place in value chain
o Manufacturers – OEM
o Technology providers
o Tier 1, Tier 2, Tier 3 component suppliers
o Raw material/commodity suppliers
o Machine tool suppliers
o Project companies
o PMC / AMC services, consultants
o Buyers’ industry in case of B2B
o Funding companies
o Traders
o Wholesalers
o Franchisees
o Retailers
o Business service providers – IT, manpower, logistics
o Integrated production
o Any other business model
 Sectors & M&A Deals APOHANTM

New Age Technologies Infrastructure Commodities Media & Entertainment Trade Agricultural
▪Blockchain ▪Construction ▪Steel ▪Agriculture
▪Artificial intelligence ▪Publication ▪Home Trade
▪Real estate ▪ Metals & alloys ▪Film ▪Import ▪Fishing
▪Robotics ▪Roads & highways ▪Chemicals
▪Automation ▪Music ▪Export ▪Dairy
▪Drones ▪Ports ▪Cement ▪Event Management ▪Entrepot ▪Poultry
▪Big Data ▪Airports ▪Coal ▪Art industry ▪Horticulture
▪Cloud ▪Inland waterways ▪Petroleum Business Services ▪Wood
▪3D Printing ▪Water ▪Natural gas Information Technology ▪Communication ▪Tobacco
▪Immersive reality ▪Waste ▪HW & networking ▪Banking ▪Paper
▪Holography ▪Mining Engineering
▪Nanotechnology ▪Software design ▪Insurance
▪Energy ▪Civil ▪Web & app design ▪Transport Other
▪Advanced materials ▪Power ▪Mechanical
▪Electric vehicles ▪ERP ▪Logistics ▪Pharmaceuticals
▪Hydrogen cells ▪Telecom ▪Electrical ▪Call centres ▪Distribution channel ▪Defence
▪Internet of Things ▪Environment ▪Electronics ▪BPO ▪R&D ▪Municipal services
▪Renewables ▪Instruments ▪Digital media ▪Equity research ▪Diversified
▪Waste to power Social Infrastructure ▪Chemicals ▪Social Media ▪Surveys ▪EPC
▪Biomass to power ▪Education ▪Internet ▪Data analysis ▪PPP
▪Genetics ▪Hospitality Manufacturing ▪Other
▪FinTech EduTech ▪Tourism ▪Automotive
▪Collaborative Tech ▪Health ▪Ship building
▪Quantum computing
▪Smart cities ▪Air craft
▪New age screens
▪LBS
▪Connectivity
SMEs, emerging technology companies are a rage among investors!
APOHAN CORPORATE CONSULTANTS PRIVATE LIMITED
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 APOHANTM

Section 3:
1. Why M&A

2. Misconceptions about M&A in

SMEs
 The Benefits From M&A Activities APOHANTM

◦ Increased scale of operation ◦ Growth w/o new cash

◦ Economies of scale
◦ Brand goodwill
◦ Market share/leadership
◦ Access to new markets
◦ Enhanced market share
◦ New geographic presence
◦ Synergies of operations
◦ Tax, subsidy, incentive benefits
◦ Reduction in competition
◦ Reduction in pressure on prices
◦ Settlement of liabilities, debts
◦ Financial turnaround of distressed assets
◦ Less overheads
◦ Ready made listed public form
◦ Infusion of money for growth
◦ New close stakeholders
◦ Removal of capability deficits
◦ Bulk buying advantage
◦ Enhanced creditworthiness
◦ Enhanced credentials for tenders
◦ Investment in upgradation, technology, R&D

A well undertaken M&A can transform a company into a giant in future.

There are virtually unlimited benefits.
 The Dilemma Between Growth & Control APOHANTM

▪ Smaller holding in a large, growing entity should be preferred over large holding of a small, stagnant entity
▪ Difference of opinion on current valuation is insignificant compared to future gain in total valuation
▪ Business growth is a dream of every businessperson
▪ Internal accruals are often not sufficient to fuel growth dreams
▪ Organic growth is slow, painful & uncertain
▪ Benefits of synergy are absent in organic growth
▪ Attachment of control even if competent partner is available is more for psychological satisfaction
▪ A wise management would choose growth over control
▪ The very purpose corporate structure is growth through capital participation
▪ Dilution of control may provide financial expertise for a technocrat
▪ Relationship with a rich entity may come handy in crisis
▪ Investment contracts can be designed to address many control expectations & concerns
▪ Complexity doesn’t make a professional reason to avoid M&A route
▪ Delegation can be done at market cost level & not control improves life quality
Sarpanch of a village?
Or
Minister in central cabinet?
 Timing of M&A – Bargaining Power of Seller APOHANTM

Financial Distress Growth Financing Requirement Introvert Businesses

▪ Supplier payment defaults ▪ WC for 100% capacity utilization ▪ Not able to take decisions
▪ Working capital defaults ▪ Capacity expansion ▪ Don’t know right time to grow
▪ Bank NPA ▪ Product portfolio expansion ▪ Waiting to fail but don’t know
▪ Geographical expansion that
▪ Lok Adalat
▪ Vertical – forward & backward ▪ Loosing good opportunity
▪ Company Law Board
expansion ▪ No timely succession planning
▪ Strategic debt restructuring ▪ Horizontal or lateral expansion ▪ No horizontal or vertical
▪ SARFAESI, DRT, DRAT ▪ Inorganic growth integration
▪ Asset reconstruction ▪ New greenfield or brownfield project ▪ Surviving on luck
▪ CIRP under IBC process /NCLT ▪ New product development, technology, ▪ Surviving on relationships
▪ High Court/ Supreme Court R&D
▪ Viable loss making business ▪ New business structure, contract
▪ Unviable business structure
▪ Business under liquidation ▪ Diversification
▪ International expansion
The ability of company to bargain valuation & dictate terms is least when business is foreseeing
liquidation & the highest when the business is growing at fast pace with very high margins & low risks.
 APOHANTM

:
Link
Financial health & M&A timing (25
indicators)

https://www.apohanconsultants.com/financial-strategy/deteriotaring-
financial-performance/
 APOHANTM

Section 4:
Success of Deal
 The Supreme Misconception: Die-Hard Question of SMEs:
Do You Have an Investor? APOHANTM

A Bigggg Yes… Provided that Business & Investor

◦ the management has a record of financial
integrity;
◦ the company has sound competence in its
technology, products, services, markets &
competition & the trends in them
◦ There is a priced demand for the products that
can create sustainable profits
◦ There is in place or can be put in place marketing
capability & marketing infrastructure
◦ There is possibility of returns on investment in
proportion of risks
◦ The offer to be made to the investor is
reasonable, rational.
◦ There is readiness to undergo the rigorous
M&A process documentation.
◦ Doing business is very complex & difficult & doing
financial investment is relatively very easy.
◦ The number of eligible businesses is very low & the
number of eligible investor is very high.
◦ Typically, the investment requirement of a business is
relatively low.
◦ The ticket size of investment of many investors is very
high.
◦ There is a lot of money chasing a very few good
opportunities.
◦ Investible money is not a rare commodity in the world.
◦ The alternative investment opportunities very less
lucrative & potent.
◦ Businessmen think investors are rare because all the life
they were looking only for clients, not investors.

No investor invests crores of rupees because they merely KNOW the M&A advisors like us.
An investment is always based on the business merit alone!
 Key Deal Success Factors APOHANTM

1. Market, marketing infrastructure, client network and marketing vision – Go/NoGo

2. Technical, technological and operational merit of a business – 80% weight
3. Clarity of M&A objectives, management maturity
4. Past financial performance ( Except for stressed funding) – Don’t worry
5. Financial integrity, passion of the promoters/directors, USPs – Extremely Crucial
6. Financial viability of business & identification/communication of all future risks
7. Existence of all internal documentation, merits claim documents
8. Readiness of quality transaction documentation through professionals
9. Readiness to (& knowledge about) undergo the rigorous M&A process (& not compliances)
10. Practical expectation of the M&A time-frame (…)
11. Provision for the total M&A transaction cost
12. Focus on value addition (growth & turnaround) in future over present
13. Rationality and reasonability of the valuation/offer to the investor
14. Experienced, capable & networked M&A consulting infrastructure/ecosystem
15. Business vision to assess the benefit in retrospect

SME’s first question is the last question!

7/12/2020 APOHAN CORPORATE CONSULTANTS 18

Three Types Of M&A Failures APOHANTM

1. FAILURE OF DEAL CLOSURE:

2. FAILURE OF HARMONY BETWEEN MANAGEMENTS:
3. FAILURE OF MERGER INTEGRATION:

APOHAN CORPORATE CONSULTANTS PRIVATE LIMITED

7/12/2020 19
 Reasons for Deal Failure for Deserving SMEs APOHANTM

1. Brokers appointed by SMEs as M&A consultants

2. No knowledge of equity funding market & process
3. Misconceptions about equity
4. No financial model, no investment schedule
5. No deal structure
6. No financial contract
7. No clear offer
8. No 360 degree expertise – MBA strategy, MBA finance, MBA marketing, Sector expert, Accounting
expert, Taxation Expert, Secretarial expert, Business lawyer, Valuation expert
9. No access to Big 4 M&A consultants
10. No communication infrastructure
11. No network of investors
12. No internal documents
13. No transaction documents

Merchant bankers or Investment bankers who are basically consultants underwrite IPOs!
Now understand the importance of “merit of business” from investment perspective!!
7/12/2020 APOHAN CORPORATE CONSULTANTS 20
 APOHANTM

Get Rid of Misconceptions

https://www.apohanconsultants.com/mergers-acquisitions/reasons-why-
equity-funding-or-ma-is-not-common-among-indian-smes/
 Reasons Why Equity Funding Or M&A Is Not Common
Among Indian SMEs
▪ Lack of awareness of the advantages of equity
▪ Absence of an organized equity market
▪ Lack of business growth appetite
▪ Insignificant & risky segment for prestigious M&A
advisory companies
▪ Lack of investor community access
▪ Too much advertising of business alliance failures
▪ Confusion in choice of growth & management control
▪ Requirement of disclosure of critical business
information
▪ Selling business – stigma notion
▪ Hectic documentation & information collection
▪ Integrity of accounts
▪ Poor confidence or hope for getting equity
▪ Unsuitable legal form of business
APOHANTM
▪ No independent directors & stakeholders
▪ Insufficient deal preparation
▪ Reliance on audit & tax professionals for M&A work
▪ Lack of time with SME management
▪ Complex chain of brokers & no direct engagement with M&A
consultants
▪ No single window M&A solution companies for SMEs in the
market
▪ M&A communication is difficult & complex
▪ Notion of inferior side
▪ Higher transaction cost
▪ Resistance for issuing consulting mandate
▪ No appreciation of time-frame
▪ Unreasonable expectation of valuation
▪ Unclear equity contract conditions
 Beware of Brokers! APOHANTM

▪ The brokers shouldn’t be taken as M&A consultants!!!

▪ They don’t know M&A process details and may reveal your M&A intent to wrong entities. A company
rumoured to be sold risks business relations
▪ They don’t know many investors & even if they know, no professional investor invests crores of rupees on
their personal recommendation.
▪ They make difficult getting an investor as the investor requires direct mandate from the business/seller to
the M&A consultants.
▪ Investor gets put-off by higher brokerage charges as they are ultimately paid by the company.
▪ Brokers increase cost of acquisition of finance without much contribution in deal making, documentation,
trust building,
▪ They delay M&A closure as it takes them a lot of time to make an agreement, decide payment sharing, etc
as they don’t do this full time.
▪ They accept any terms & conditions & that is why they are wrongly perceived as very lucrative M&A.

A decent broker would charge a nominal referral fee.

A full-fledged M&A services company has immense investor
network (as well)!!!
 APOHANTM

Importance of Investor Perspective

https://www.apohanconsultants.com/financial-strategy/perspective-of-an-equity-
investor-in-financing-a-private-business/
Perspective Of An Equity Investor In Financing A
Private Business APOHANTM

Perspective of an equity Investor in financing a private

business

RISK OF BUSINESS
MANAGEMENT QUALITY ASPECT
LIQUIDITY ASPECT
TERM ASPECT
CONTROL ASPECT
ENTRY PROCESS
SECTOR & LOCATION ASPECT
TICKET SIZE ASPECT
POTENTIAL/VALUATION & OFFER ASPECTS
CONTRACTUAL ASPECTS
 APOHANTM

Section 5:
Economics of Equity
Why you should not worry about equity funding!
Types Of Business Transactions APOHANTM

Business & Non-

business
Transaction

Investment Operational
Capital Transaction
Transaction Transaction

1. Strategic transactions 5. Mergers and acquisitions

2. Sale of strategic assets
3. Sale of shares or
securities
4. Existing people
transactions (buyback,
Rights issue, Bonus)
6. Business restructuring, financial
restructuring
7. Joint ventures
8. Succession planning/ management
outsourcing Lease, license, royalty,
sub-contracting, trading, etc.

7/12/2020 APOHAN CORPORATE CONSULTANTS 27

 Order of Liquidity APOHANTM

Order of liquidity
Cash Industrial goods

Gold A shop

Bank balance A Listed company

Listed shares, bonds, units Piece of art

FMCG goods Real estate

White goods A nuptial knot aspirant

Commodities Private Limited business

7/12/2020 APOHAN CORPORATE CONSULTANTS 28

 Economics of Equity (1/5) APOHANTM

Financial
Savers Intermediaries
Borrowers

• Through
Savers save money in two formats financial
intermediaries
• NBFC’s
Equity Debt Savers save • Banks
money • Lends money
to business
Equity means no guaranteed Debt means guaranteed, • Lends the
return and no security of fixed return with all possible money to
the investment as well security customers of
business
• Debt acts as the low cost resource of capital for
business
Debt
• Debt is redeemed in a timely fashion providing
financial leverage to the businesses
 Economics of Equity (2/5) APOHANTM

Lends money in the form of

debt with high rate of interest

Savers money Banks Borrowers

Debt creates
equity (profit)
Interest paid to
for banks
secured lenders
is very low
Customers money converted into profit
reserves or equity of the businesses

Note:
• Directly Investing in the business will give high returns
• Lending is intrinsically in unattractive
• If your business is having high potential, don't worry about availability of equity capital
• Interest to saver < lending rate of banks to businesses < return on capital employed in business
 Economics of Equity (3/5)
❑ Risk perception of business
1. The tendency to use money bank
deposit is more because of risk
perception of business
2. Much of the risk perception is out of
absence of laws, regulatory
framework, absence of
documentation, absence of network,
lack of knowledge of business, etc
rather than the actual risk of the
business
3. It is only the higher risk perception
that keeps the debt market live.
APOHANTM
❑ How to lower the risk perception? ❑
1. Compliances 1. When the risk of the savers is taken care
2. Observance of laws of the land of, the tendency to lend gradually gets
converted into tendency to invest in
3. Transparent accounting equity
4. Business documentation & records 2. Equity capital can be very easily mobilize
5. Corporate policies
3. Loans can be easily liquidated
6. Substantiation of the claims
regarding the strengths of the 4. Relative it is very difficult to liquidate
company equity
7. Financial integrity 5. The intrinsic tendency of investor if to
8. Credit rating invest in a high return opportunity
provided that his concerns regarding risk
9. Professional business management are taken care
10. Track record of financial 6. It is not the investment that is in
performance
demand, but it is the quality investment
11. Risk management opportunity that is in demand.
 Economics of Equity (4/5) APOHANTM

❑
❑
1. FDI is equity investment in India by foreign companies 9. Their companies are investment worthy in their
own countries
2. They bring in only 30% off capital requirement from
abroad 10. They make their subsidiaries or joint ventures in
India investment worthy
3. 70% capital cost and working capital is mobilized from
banks in India 11. Those Indian companies who are already a very
4. They remit the profits that they make in India good professional setup attract FDI and grow with
them
5. In comparison with the actual money they brought in,
the remittance is very high and it affect the current 12. The company's left out cannot stand their
account balance of the country competition in future
6. As the value of FDI business increases over time as the 13. There are respectable local exceptions which are
business becomes bigger, technically there is a run as professionally as the companies in the
possibility that there is much higher capital outflow developed countries, but these examples are very
from India few
7. So why do we need FDI to mobilise our own saver's 14. Maximum SMEs always remain small, never
money into business?
become even listed small caps, forget being a giant
8. The answer is: They have the capability to make a MNC diversified conglomerate, as they never work
company equity investment worthy for rapid inorganic on improving their investibility
expansion
 Economics of Equity (5/5) APOHANTM

1. Business is all about capability to make profit from operations taking care of all technical,
technological, operational, marketing abilities coupled with investibility infrastructure and it has
nothing to do with how much money you have in your own pocket to do what you want to do.
2. Of course, you need to have money to prepare a workable project plan, to do the initial preparatory
work & and the cost of investibility infrastructure
 APOHANTM

Section 6:
Key M&A Types
https://www.apohanconsultants.com/mergers-
acquisitions/#classificationofmanda
 A. Mergers & Acquisitions (1/3) APOHANTM

Business growth Financial turnaround M&A for

through equity funding: of distressed business Retiring businessmen:
❑ Equity funding for growth ❑ Non-performing assets ❑ Succession planning
initiatives
❑ Financial turnaround ❑ Management outsourcing
❑ Equity funding for new projects
❑ Business Restructuring ❑ Death will management
❑ Equity funding for working capital
❑ Financial restructuring ❑ Sellout advisory
❑ Inorganic expansion acquisitions
❑ Asset reconstruction
❑ Strategic equity investment
❑ Bank NPA advisory
❑ Financial equity investment
❑ IBC /CIRP/SARFAESI Advisory
❑ Buy-side advisory

APOHAN CORPORATE CONSULTANTS PVT LTD WWW.APOHANCONSULTANTS.COM

 A. Mergers & Acquisitions (2/3) APOHANTM

Combinations & divisions Special business alliances International business

❑Mergers ❑ Local Indian equity joint venture ❑ India entry strategy
❑Acquisitions ❑ Contractual joint venture ❑ Initial public offer
❑Demergers ❑ Franchisee contract ❑ ADR GDR
Sale of strategic assets ❑ Lease contract ❑ JV through Foreign direct
❑Asset sale investment
❑ License agreement
❑ Cross border deals
❑Slump sale ❑ Royalty contracts
Sale of shares ❑ Overseas direct investment
❑ Consortium for tender
❑Share transfer ❑ EPC alliance contracts
❑Sell side advisory ❑ PPP alliance for infrastructure
❑Buy side Advisory

APOHAN CORPORATE CONSULTANTS PVT LTD WWW.APOHANCONSULTANTS.COM

 A. Mergers & Acquisitions (3/3) APOHANTM

Corporate transactions Management of Discreet services

company control ❑ M&A Deal structure
❑ Buyback
❑ Cross holding mergers and ❑ Deal advisory
❑ Bonus issue acquisitions
❑ Rights issue ❑ M&A costing
❑ Differential voting rights
❑ Sweat equity issue ❑ Financial models

❑ ESOPs ❑ Control deals ❑ Business transfer contracts

❑ Private placement ❑ Crowd funding ❑ M&A negotiations

❑ Preferential allotment ❑ Core investment company ❑ Corporate process

management
❑ Dividend policy ❑ M&A taxation
❑ Investor finder services
❑ M&A counselling

APOHAN CORPORATE CONSULTANTS PVT LTD WWW.APOHANCONSULTANTS.COM

 APOHANTM

Section 7:
Types of investors
https://www.apohanconsultants.com/mergers-
acquisitions/#classificationofmanda
Types of Investors APOHANTM

• Friends, relatives & family:

• Sweat equity (executive directors and key professionals):
• ESOPs (employees):
• Seed investors:
• Angle investors:
• Simple agreement for future equity (SAFE) investors:
• The unknown, unmet general citizen investor (Crowdfunding):
• Venture capital fund (VC Investors):
• Private equity fund (PE investors):

Types Of • Family offices (The rich family investors):

• High net worth individual (HNI) Investors:

Financial • Non-resident Indian (NRI) Investors:

• Asset Management Companies (Mutual Funds):
• The various taxpayers as Investors:
Investors • Investment trusts as Investors (REITs & InvITs):
• Investment bankers as the Investors:
• Qualified institutional buyers (QIBs) as Investors:
• NBFC core investment company (CIC) Investor:
• Hedge Fund Investors:
• Sovereign wealth fund (SWF):
• Pension Funds
• Fund of Funds:
• Alternative investment funds (AIF):
• Foreign direct investor (FDI):
 Exercise APOHANTM

❖ Would you or would you not take equity funding?

❖ What is reason for the same? Evaluation method…
❖ Do you think that your business has sufficient merit to get equity from ❖ Rating on 1 to 10 basis
❖ No reference to financial
third-party independent investor?
statements
❖ Do you think that your businesses has everything to attract an investor? ❖ No advice of any officers, etc
❖ Are you ready for rigorous M&A process? Send answers to:
❖ What is the most compelling factor in your business that will make an Arun.joshi@apohanconsultants.com,
Shailesh.waghmare@apohanconsultants.com
investor to invest in it? Pavan.kale@apohanconsultants.com

❖ What is the valuation of your company? (Do you know it?)

❖ Are you psychologically open to work with independent people as your
co-directors?
❖ Have you identified companies you like to do M&A with?
❖ What are the synergies?
 APOHANTM

Question & Answers

Contacts APOHANTM

Contact Person Arun Joshi Shailesh Waghmare

E-mail arun.joshi@apohanconsultants.com Shailesh.waghmare@apohanconsultants.com

Phone +91 20 25650005 +91 20 25650005

Mobile +91 9810481325 +91 96500 13256

Website www.apohanconsultants.com

Address Office no. 11, 1st floor, Shriram Complex, Model Colony Rd.,
Shivajinagar, Pune, Maharashtra, India – 411016

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APOHAN CORPORATE CONSULTANTS PVT LTD WWW.APOHANCONSULTANTS.COM