ICAI Peer-Reviewed Firm · Chartered Accountants serving clients across India since 1991 partner@auditskj.com Click to view number

Fundraising & Capital Advisory

Fundraising readiness, projections, and capital-structure guidance.

Overview

What this involves

Raising capital in today's world is no longer about selling a vision; it is about proving unit economics and regulatory resilience. Institutional investors, venture capitalists (VCs), and private equity (PE) firms are deploying capital with unprecedented scrutiny. Whether you are a startup preparing for a Seed round, a growth-stage company structuring a Series B, or an SME exploring venture debt, entering negotiations without institutional-grade financial preparation will result in severe equity dilution or a rejected term sheet.

Our Fundraising & Capital Advisory service acts as your internal investment banking team. We do not just build your financial models; we prepare your entire data room to anticipate and clear rigorous buyer due diligence. We advise founders on the optimal capital structure—balancing priced equity rounds, convertible notes, and non-dilutive venture debt. Furthermore, with the abolition of the Angel Tax and the simultaneous tightening of cross-border Foreign Direct Investment (FDI) rules under the FEMA mandates, we ensure your fundraising strategy is not just commercially viable, but legally bulletproof.

How we help

  • Cap Table Optimization: We structure your early funding rounds to prevent 'founder squeeze.' We accurately model complex conversion math for SAFEs, convertible notes, and ESOP pools so you know exactly how much you will own post-dilution.
  • Data Room Readiness: We pre-audit your financial, tax, and secretarial records before investors see them, fixing compliance gaps that could otherwise trigger deal-killing 'Material Adverse Effect' clauses.
  • Cross-Border Capital Expertise: We seamlessly navigate the FEMA FDI guidelines, including compliance with cross-border guarantee regulations for foreign VC funding.
  • Debt vs. Equity Strategy: We objectively evaluate your cash flows to recommend the cheapest cost of capital, helping you leverage venture debt, revenue-based financing, or factoring to extend your runway without giving up board seats.
Discuss your needs
Key Points

What you should know

Rise of the iSAFE & CCPSDirect equity issuance in early rounds is fading. The market standard is to issue Compulsorily Convertible Preference Shares (CCPS) or India Simple Agreements for Future Equity (iSAFEs), which defer the valuation debate until a larger institutional round is raised.

The Anti-Dilution TrapIn a volatile market, investors will push for strong 'anti-dilution' rights (like full ratchet or broad-based weighted average). If you later raise funds at a lower valuation (a 'down round'), these clauses can severely wipe out founder equity. Negotiating these terms at the Term Sheet stage is critical.

Venture Debt CovenantsVenture debt is excellent for minimizing dilution, but it is dangerous if your cash flow is unpredictable. Debt comes with strict financial covenants; breaching them gives lenders the right to call back the loan or force an equity conversion at heavily discounted rates.

Questions

Frequently asked questions

Earlier than most founders think. Getting your financials, projections, and data room in order well ahead materially improves outcomes.

Our role is to make you fundable and support the process; we focus on the financial readiness and advisory side.

Pre-money valuation is what your company is worth before the investor's cash is added to your balance sheet. Post-money valuation is the pre-money valuation plus the new investment amount. Your equity dilution is always calculated based on the post-money valuation.

No. For cross-border capital (FDI), strict pricing guidelines apply. The money must be received through proper banking channels (with an FIRC), shares must be issued within 60 days, and the transaction must be reported to the RBI via the FC-GPR form on the FIRMS portal, accompanied by a mandatory FEMA valuation report from a Registered Valuer or Merchant Banker.

Yes. We help you weigh the funding mix and capital structure that best fit your goals.

Yes. We help you prepare for and respond to investor or lender diligence.

Related

More in Virtual CFO Solutions

Get In Touch

Speak to us about Fundraising & Capital Advisory

Tell us a little about your requirement and our team will get back to you with the right guidance and a clear next step.

Enquire About This Service

Share your details and a qualified Chartered Accountant will get back to you. No obligation.

How can we help?

🔒 Your information is kept strictly confidential.