1135 | Foundations of Equity Fundraise

This course is a foundational course in private equity and venture capital transactions. It is the next step to corporate law courses taught in a law school. Students enrolling into this course should have finished their compulsory corporate law courses. Given the robust private equity/ venture capital environment in the world today, corporate lawyers (even the junior-most of them) are required to know and understand the basics of fundraising. This course would introduce the students to the fund-raising process and the lawyer’s role in navigating through it. I have approached this course with one question in mind: “What would I like an associate assisting me at a law firm know, so that while helping me on deals she will be a force multiplier?”

The template of a term sheet for an equity fundraise will form the basis of most of the discussion and analysis. Students will also be exposed to the formats for share subscription agreement, shareholders’ agreement, employment agreements and corporate secretarial documents for such a fundraise. The terms of a standard term sheet will be discussed in some detail and thereafter be mapped to the remaining agreements and documents mentioned hereinabove. The course is designed to provide anintroduction to the terms of an equity fundraise and will encourage the students to think through the motivations of the parties (i.e. the new investor, existing investor, investee and promoters of the investee) for negotiating each of the terms. Since this course is an introductory course to fundraising,nuances of drafting, reviewing and negotiating the agreements mentioned hereinabove have been excluded.