Startup Advisory

Advisory to founders and investors on fundraising, valuation, deal terms, strategic acquisitions and exits.

Context

The decisions that decide what founders keep

A funding round sets far more than the valuation. Liquidation preferences, anti-dilution protection, board rights and exit clauses determine how value is shared when the company is eventually acquired or listed. These terms are often agreed early and are difficult to renegotiate later.

The landscape has shifted in founders’ favour: the tax on share premium, the so-called angel tax, has been abolished, and Indian capital markets now offer a credible route to listing. Many companies are also bringing their holding structures back to India in preparation for an Indian IPO.

Key provisions

Provisions relevant to startups

Area	Provision
Tax holiday	Deduction of 100% of profits for three consecutive years out of the first ten, for eligible startups certified by the Inter-Ministerial Board (Section 80-IAC of the Income-tax Act, 1961)
Share premium taxation	The tax on share premium in excess of fair value (Section 56(2)(viib), the “angel tax”) was abolished from assessment year 2025–26
Foreign investment	Issue price not less than fair value under an internationally accepted pricing methodology; Form FC-GPR to be filed within 30 days of allotment
Convertible notes	Recognised startups may issue convertible notes to non-residents for ₹25 lakh or more in a single tranche, convertible or repayable within ten years
ESOPs to promoters	Startups may grant ESOPs to promoters and to directors holding more than 10% for up to ten years from incorporation
Fast-track merger	Mergers between startups and small companies may use the Section 233 route

The Income-tax Act, 2025 replaced the Income-tax Act, 1961 from 1 April 2026. Section references should be read with the corresponding provisions of the new Act.

Scope of services

Our startup advisory services

Fundraising advisory

Equity story, financial model, investor identification and management of the process from first meeting to term sheet.

Valuation

Valuation for primary rounds, secondary transfers and foreign investment pricing, with a defensible methodology.

Term sheet negotiation

Negotiation of preference, anti-dilution, governance, founder vesting and exit provisions.

Investment documentation

Share subscription and shareholders' agreements, CCPS and convertible note terms, aligned with the term sheet.

Secondary transactions

Liquidity for founders, employees and early investors through structured secondary transfers.

Acquisitions by startups

Bolt-on acquisitions and acqui-hires, including share-swap consideration and integration of teams and technology.

Strategic exits

Preparation for and management of an acquisition by a strategic acquirer or a larger platform.

Reverse flip

Redomiciling a foreign holding company to India through a share swap or an inbound merger, with the tax and FEMA analysis.

Path to listing

Planning the capital structure, governance and holding periods for a later SME or Mainboard IPO.