Reference Links

 https://www.anbca.com/7-annual-compliance-for-opc/
 https://medium.com/@neusource/what-is-the-advantages-and-disadvantages-of-
publiclimited-company-a1ecb3d68d9e
 Sahitya Bhawan Publication , Company Law, Dr. G.K Varshney
PHASE 2
Investors are the person who invest their money in the company so that they can get the return on their
invested money and earn good return on the invested amount. It helps the company to grow and work
efficiently and effectively in their operations. It also helps the company in achieving their goals.
Investor also get dividend in the return of the money he has invested in the company.

TYPES OF INVESTORS
We can classify the Investors in five types i.e., the types of investors are as follows-:
1. Angel Investors
2. Peer to peer Investors
3. Banks
4. Personal Investors
5. Venture Capitalists

1). Angel Investors – They are the type of investors who invest their money in the start-up they are
experienced investors who invest their money in the company and they invest large and contribute more
considerable sums of money in the business. They are usually a successful business person who invest their
personal wealth into the personal rewarding business. Some well known angel investors are –
 Sunil Kalra
 Sharad Sharma -an ex-SVP Yahoo.
 Rajan Anandan- Vice President Google.Inc
2). Peer to Peer Investors - Peer-to-peer lenders can be individuals or groups. They help fund small
businesses. If you want to apply for peer-to-peer lending, you need to apply with companies who are
specialized in this type of financing. Lenders work with these companies to find businesses they want
to finance.
Best Peer-to-Peer Lending Websites of August 2021
 Best Rates: Perform
 Best for Borrowers with Limited Credit History: Upstart
 Best for Borrowers with Established Credit History: Prosper
 Best for Small Businesses: Funding Circle
Pros & Cons of raising money through peer-to-peer Lending

Pros
 Competitive interest rates for borrowers with excellent credit
 2.No prepayment penalties
 Cons
 Low loan maximum
3). Personal Investors -: Most business owners usually depend on their close acquaintances, friends or
family to help them by investing in their business, normally during the initial stages. These types of
investors are called personal investors, and even though they can assist with funding, there is a limit to
how much they can invest in your company.
It is often easier to convince a loved one to help you out, but there is heavy documentation that is
required for which they can be taxed for helping as well. So, if you are going to take a personal
investor’s help, ensure that you consult a lawyer to help you avoid any complications.

PRIVATE EQUITY – It is that type of investment in which the investment is made in the
company which is not a public company or private equity (PE) comes from high-net-worth individuals
(HNWI) and firms that purchase stakes in private companies or acquire control of public companies
with plans to take them private and delist them from stock exchanges.
Types of Private Equity Funds
Private equity funds generally fall into two categories: Venture Capital and Buyout or Leveraged
Buyout.

Venture Capital -: A venture capitalist (VC) is an investor who offers capital to the start-ups that
are believed to have long-term growth potential. Venture capitalists are normally investment banks,
well-off investors, and any other financial institutions. Even though this is a risky way for investors to
put in their funds, a successful payoff is worth it.
TYPES OF VENTURE CAPITAL FUNDING
 Seed money: Low level financing for proving and fructifying a new idea
 Start-up: New firms needing funds for expenses related with marketing and product development
 First-Round: Manufacturing and early sales funding
 Second-Round: Operational capital given for early-stage companies which are selling products, but
not returning a profit
 Third-Round: Also known as Mezzanine financing, this is the money for expanding a newly
beneficial company
 Fourth-Round: Also called bridge financing, 4th round is proposed for financing the "going public"
process

SOME VENTURE CAPITAL COMPANIES IN INDIA

 Sequoia India
 Blume Ventures
 Accel
 Mumbai Angels Network
Buyout or Leveraged Buyout (LBO)
Contrary to VC funds, leveraged buyout funds invest in more mature businesses, usually taking a
controlling interest. LBO funds use extensive amounts of leverage to enhance the rate of return.
Buyout finds tend to be significantly larger in size than VC funds.
SME IPO (Small and medium enterprise Initial public offering) - An SME IPO is a way for a privately
owned Small and medium enterprises (SME) company to sell its shares to the public for the first time
and gets listed at BSE SME or NSE Emerge platform. Companies with minimum post-issue capital of
Rs 1 crore and a maximum of Rs 25 crores are eligible for SME IPO in India. BSE SME and NSE
Emerge platforms allow SME companies to raise funds and get listed at the exchange through an SME
IPO.
Some of the SMEs IPO
 Aashka Hospitals Limited IPO
 Network People Services Technologies Limited IPO
 Rex Pipes and Cables Industries Ltd IPO
 Gretex Corporate Services Ltd IPO
 AA Plus Tradelink Limited IPO
CRITERIA FOR BSE LISTING
A 1. Post-issue Paid-up Capital:
The post-issue paid up capital of the company shall be at least Rs. 3 crore.
2. Financials
Net worth (excluding revaluation reserves) of at least Rs.3 crore as per the latest audited financial
results.
B. Net Tangible Assets:
At least Rs.3 crore as per the latest audited financial results.
C. Track Record:
Distributable profits in terms of Section 123 of the Companies Act 2013 for at least two years out of
immediately preceding three financial years (each financial year has to be a period of at least 12
months). Extraordinary income will not be considered for the purpose of calculating distributable
profits.
OR
The net worth shall be at least Rs.5 crore.
3. Other Requirements:
The Company shall have a Website.
The company shall facilitate trading in demat securities and enter into an agreement with both the
depositories.
There should not be any change in the promoters of the company in preceding one year from date of
filing the application to BSE for listing under SME segment.
4.Disclosures:
A certificate from the applicant company / promoting companies stating the following:
The Company has not been referred to the Board for Industrial and Financial
There is no winding up petition against the company that has been accepted by a court.
IPO START-UP An initial public offering (IPO) refers to the process of offering shares of a private
corporation to the public in a new stock issuance. Public share issuance allows a company to raise
capital from public investors.
PROCESS OF LISTING AN IPO((STARTUP)
Step 1: Hiring of An Underwriter or Investment Bank.
Step 2: Registration For IPO.
Step 3: Verification by SEBI:
Step 4: Making an Application to The Stock Exchange.
Step 5: Creating a Buzz by Roadshows.
Step 6: Pricing of IPO.
Step 7: Allotment of Shares.

Funding Series

A startup with a brilliant

business idea is aiming to
get its operations up and
running. From humble
beginnings, the company
proves the worthiness of
its model and products,
steadily growing thanks to
the generosity of friends,
family and the founders'
own financial resources.

(Image Source : Carocked)

Series A Funding
Once a business has developed a track record (an established user base, consistent
revenue figures, or some other key performance indicator), that company may opt
for Series A funding in order to further optimize its user base and product offerings.
Opportunities may be taken to scale the product across different markets. In this
round, it’s important to have a plan for developing a business model that will generate
long-term profit. Often times, seed startups have great ideas that generate a substantial
amount of enthusiastic users, but the company doesn’t know how it will monetize the
business.
Series B Funding
Series B rounds are all about taking businesses to the next level, past the development stage
Investors help startups get there by expanding market reach. Companies that have gone
through seed and Series A funding rounds have already developed substantial user bases and
have proven to investors that they are prepared for success on a larger scale. Series B funding
is used to grow the company so that it can meet these levels of demand.
Series C Funding
Businesses that make it to Series C funding sessions are already quite successful. These
companies look for additional funding in order to help them develop new products, expand
into new markets, or even to acquire other companies. In Series C rounds, investors inject
capital into the meat of successful businesses, in an effort to receive more than double that
amount back. Series C funding is focused on scaling the company, growing as quickly and as
successfully as possible.

SERIES D Funding
A series D round of funding is a little more complicated than the previous rounds. As mentioned,
many companies finish raising money with their Series C. However, there are a few reasons a
company may choose to raise a Series D.
The first is positive: They’ve discovered a new opportunity for expansion before going for an
IPO, but just need another boost to get there. More companies are raising Series D rounds (or even
beyond) to increase their value before going public. Alternatively, some companies want to stay
private for longer than used to be common. Each of these are positive reasons to raise a Series D.
The second is negative: The company hasn’t hit the expectations laid out after raising their Series
C round. This is called a “down round,” and it’s when a company raises money a lower valuation
than they raised in their previous round.
A down round may help a company push through a tricky time, but it also devalues the stock of
the company. After raising a down round, many startups find it difficult to raise again, as trust in
their ability to deliver on their promises has eroded. Down rounds also dilute founder stock and
can demoralize employees, making it difficult to get back ahead.
Reference Links

 Series A, B, C, D, and E Funding: How It Works | Startups.com

 Nykaa, PolicyBazaar, Paytm — the Indian startup IPO lineup (yourstory.com)
 https://www.anbca.com/7-annual-compliance-for-opc/
 https://medium.com/@neusource/what-is-the-advantages-and-disadvantages-of-
publiclimited-company-a1ecb3d68d9e