Shivatmika Bathija’s Post

Last week we saw significant global deal activity, highlighted by KKR's $4.8 bn acquisition of learning management company Instructure and Ascential's $1.6 bn sale to Informa. On the fundraising front, relevant deals include Clio - Cloud-Based Legal Technology's $900 mn Series F, led by New Enterprise Associates (NEA) Associates, which valued the company at $3 bn and Cohere's $500 mn Series D at a $5.5 bn valuation and led by PSP Investments. Other notable transactions of the week include: - Planck's $300 mn sale to Applied - Applied Intuition's $300 mn Secondary Round, with participation from Andreessen Horowitz, General Catalyst, Fidelity Investments, Lux Capital and NVIDIA - @Vanta's $150 mn Series C led by @Sequoia, valuing the company at $2.5 bn - Chainguard's $140 mn Series C, which valued the company at $1.1 bn and was led by Lightspeed, IVP and Redpoint - Harvey 's $100 mn Series D, led by GV (Google Ventures), valuing the company at $1.5 bn More detailed information on key transactions attached. Feel free to reach out in case you want to learn more about tech M&A and capital raising in LatAm. #LatAmTech #TechTransactions #Tech #Technology #InvestmentBanking #MergersAndAcquisitions #CapitalRaising #FundingRounds

Decoding the Timing of Companies Going Public 📈🚀 Uncover the strategies and factors behind the timing of companies going public in our latest feature on Market Daily! Dive into the key considerations influencing a company's decision to launch an initial public offering (IPO), including market conditions, financial readiness, and strategic goals. Learn about the optimal timing for an IPO, how companies prepare for this major milestone, and the impact of timing on their market success. Whether you're an investor, entrepreneur, or finance enthusiast, this article provides a comprehensive guide to understanding the intricacies of going public. #IPOTiming #GoingPublic #MarketDaily #FinancialStrategy #IPO #InvestmentOpportunities #CompanyMilestones #StockMarket #PublicOffering #BusinessGrowth https://lnkd.in/dNFafYfh

Understanding the key elements of a VC term sheet is crucial for any startup founder. Here are the main components to be aware of: - Valuation: This includes the pre-money valuation, which sets the company's value before the investment and affects the percentage of ownership investors will receive. - Money Raised: Investors may require the startup to raise a minimum amount before disbursing funds, ensuring the company has enough capital to achieve its goals. - Liquidation Preference: This determines the order and amount investors get paid in case of an exit. Common terms include 1x non-participating preference, meaning investors get their initial investment back before other shareholders receive any proceeds. - Board Seats: The term sheet specifies the composition of the board of directors, influencing control over company decisions. - Anti-Dilution Provisions: These protect investors from dilution if the company issues new shares at a lower price in future funding rounds. - Option Pool: The size of the stock option pool for employees, which can dilute founders' shares but is essential for attracting and retaining talent. - Protective Provisions: These are veto rights that investors hold over certain company actions, safeguarding their investment. - Dividends: While not a major focus, dividends can sweeten the deal, offering a modest return to investors before an exit. - Voting Rights: Investors often receive voting rights proportionate to their shareholding, allowing them to influence key decisions.  - Drag-Along Rights: This ensures that if the majority of shareholders agree to a sale, all shareholders, including minority ones, are obligated to sell. By understanding these terms, founders can negotiate better deals and align interests with investors, setting a strong foundation for future growth! #vdkcapital #vcfund #termsheet

Later this month I’ll be speaking at this year’s annual Shareholder Services Association conference on how New Technologies are impacting shareholder relations. And the conversation couldn’t be more timely. Computershare recently reported that nearly 75% of 2024’s annual shareholder meeting attendees were individual shareholders and guests. Read that again. 👀 So what does this mean? Among other things: It means people - individual shareholders are present and engaged. Increasingly so. It means people are calling in, showing up and learning how they and the companies they support can be better corporate citizens. It means the invisible shareholder masses, the people making up the majority of annual meeting attendees - are tired of being invisible. They are waking up to their collective power. And they want to be seen, heard and engaged with. It’s already happening. This IS the future of shareholder relationships. And the technology to embrace shareholders, and to understand shareholders, and to engage with shareholders must match. That’s where Urvin comes in - offering easy and scalable tools to connect with shareholders. You have to be in the conversation to understand the conversation. And if you plan to be in Portland, ME for the conference let me know! #shareholderelations #shareholders #investors #investorrelations #fintech #dctech #startup #founderstories

🚨 Understanding Equity Dilution: A Key Concept for Founders, Investors, and Employees 🚨 Equity dilution happens when a company issues additional shares, reducing the ownership percentage of existing shareholders. This is a critical concept in startup and growth-stage companies, as it directly impacts control, value, and the potential returns for everyone involved. Here’s a breakdown of how dilution works: 1️⃣ Issuance of New Shares: Companies raise capital by issuing new shares, increasing the total number of shares outstanding. This often happens during funding rounds, IPOs, or through employee stock options. 2️⃣ Dilution Effects: The ownership percentage of existing shareholders decreases as the pie becomes larger. For example, if a company with 1,000 shares issues 500 new shares, your 10% stake could drop to 6.67%. 3️⃣ Types of Dilution: Primary Dilution: When the company issues new shares to raise capital (common in VC funding). Secondary Dilution: Occurs when existing shareholders sell their shares. 4️⃣ Impact: Control & Voting Power: Founders and early investors may lose control over time, especially if they allow excessive dilution. Earnings Per Share (EPS): The increase in the number of shares may reduce the earnings per share unless the new capital significantly boosts company performance. Investor Sentiment: Minor dilution is often acceptable, but too much dilution could lead to skepticism and declining stock prices. 5️⃣ Mitigation Strategies: Anti-Dilution Provisions: Full ratchet or weighted average anti-dilution clauses can protect investors by adjusting the price at which they acquired shares. Debt Financing: Raising capital via debt instead of equity can avoid dilution. Share Buybacks: Companies may repurchase shares to reduce outstanding shares and counteract dilution. In summary, dilution is a double-edged sword. While necessary to fuel growth and expansion, it must be managed carefully to avoid diminishing the value of existing stakeholders. Whether you're a founder, investor, or employee, understanding equity dilution is essential for making informed decisions and protecting your interests. 🔑💡 #Startup #Investing #EquityDilution #Founders #VentureCapital #EmployeeStockOptions #CapitalRaising #BusinessGrowth #StockMarket

Tech valuations have dropped since their 2021 highs, signaling a reset for private equity. The focus has shifted from multiple expansion to value creation, including transitions to subscription models and aligning metrics with market demands. Operational efficiency is now essential for driving margins. Early diligence, KPI oversight, and leadership alignment through assessments and incentives are crucial for navigating today’s liquidity-focused environment. Accretive follow-on acquisitions present growth opportunities in fragmented sectors. Consolidating complementary businesses can unlock synergies, but success depends on rigorous diligence and seamless integration. How do you see fundamentals shaping tech M&A? Share your thoughts! #Tech #MergersAndAcquisition #PrivateEquity

Calling all exited founders! 🚀 Are you considering a new venture with a larger institution or a group of founders that you are personally backing with your hard-earned capital? It’s crucial to ensure your minority shareholder rights are well-protected from the get-go. Here’s why reserved matters and management consent rights are essential: 🔒 Value Protection: Without veto rights on strategic decisions, there’s a risk that choices detrimental to your investment could be made without your input. Reserved matters safeguard against this, ensuring all shareholders’ interests are considered. 🤝 Alignment of Interests: Consent on key issues fosters a sense of partnership and alignment. Major decisions, like changes to share capital or significant asset disposals, need broader consensus to maintain a cohesive strategy and prevent conflicts. 🎯 Incentivisation: Feeling represented in major decisions keeps you motivated and engaged. Knowing your investment is protected against unforeseen adverse decisions drives you to actively contribute to the company’s success. 🌟 Integral to Success: Your involvement isn’t just financial. Your expertise, network, and strategic insights are invaluable. Ensuring your participation in key decisions maximises your impact and propels the business forward. 🔑 Key Reserved Matters to Consider: - Amendments to share capital or rights attached to shares - Disposal of significant assets - Mergers, acquisitions, or significant restructuring - Approval of budgets and business plans - Changes to business or incorporation jurisdiction - Significant capital expenditures or debt - Alterations to the Articles of Association 🛠️ Management Consent Rights: In a joint venture, having a say in management decisions is crucial. Ensure your consent is required for significant operational and strategic moves, safeguarding your investment and aligning with your vision. Protect your interests, stay aligned, and drive success. Get in touch today. Follow me and Avery Law for more insights. #JointVentures #Startups #VC #Founders

WHY DO INVESTORS TAKE PREFERENCE SHARES AND NOT EQUITY SHARES IN START-UPs?   Many founders blindly sign shareholder agreements, without really understanding what they are getting into. So let’s understand why investors take preference shares, and founders usually have equity shares. Now, I’m sure you’ve heard of equity shares – these are ordinary shares, such as the ones listed on stock markets. On the other hand, preference shares have more rights than these equity shares. What rights? Well, for a start, any dividend is first paid on preference shares, and only if there is money left after that, does the company pay dividend on the equity shares. Of course, you would realize that most early stage startups do not make a profit, let alone pay dividends, so we can safely let this pass 😊. But the other issue is extremely important. What if the company closes down—or in legal terms, goes into liquidation? And there is still some money left in the bank? What is to be done with this money? This is the interesting part, because the investors who hold preference shares have the first right over this money. In fact, the shareholder agreement can specify how much they get back in case the company goes into liquidation. And this is called ‘liquidation preference’. As an example, the SHA could say that the preference shareholders get back 1.5 times what they had originally invested – obviously assuming there is sufficient money available. Only after this is the remainder divided pro-rata amongst the equity shareholders – typically the founders and any other investors. I hope that’s clear. There are, of course, several other reasons why you must understand the shareholder agreement you are signing. And for that, please, please consult a lawyer!   #startup #funding #investor #preference_shares #equity_shares

Thinkings on business: Timing seems to be everything in the world of business. The time to launch, the time to pivot, the time your profitability kicks, the time to increase capacity. The timing for seeking investment depends on a business's stage, goals, and industry dynamics. Typically, businesses look for funding during key phases: in the pre-startup stage to develop prototypes or validate ideas; in the early startup phase to scale operations and acquire customers after showing early traction; in the growth stage to expand into new markets or enhance offerings once a clear product-market fit is established; and in the scaling or mature stage to dominate the market, fund acquisitions, or prepare for an IPO. Before seeking investment, it’s crucial to ensure the business is ready with a compelling pitch, solid financials, and demonstrated market validation. Timing is essential, as investment should align with critical growth milestones or strategic needs.

There is a lot of talk about companies going public, but how can investors invest in companies BEFORE they go public? Consider this your how-to guide (including pros + cons) for all things pre-IPO, what we at EquityZen believe is the home of innovation & wealth creation. 👇 https://ezen.fyi/3VWkrBH #privatemarkets #preIPO #IPOs #privatecompanies #investing