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A Fine Balance | What it means to “self-regulate”

Sunitha KR, Director, LetsVenture

As an introduction, I am Sunitha and I head the early stage business at LetsVenture. With the last 8 plus years in the investment industry, first with a venture capital firm and the last 5.5 years at LetsVenture, I have been a part of over 250 transactions across stages. 

One of the foremost things we ensure at LetsVenture, and take pride in, is being transparent and balanced – we are a marketplace and we need to protect both sides, our investors and our founders.

It’s a fine balance and here is how we do it: 

  • We protect investor interest while not squeezing out the founder.  We do this by ensuring legal rights are fair in the investment round, be it the first round of the startup or later rounds
  • We ensure that all information regarding the total round, the terms, the documentation is provided, even if we are facilitating just part of the round
  • In most deals we ensure due diligence (DD) is done by a third party to give you the comfort of knowing that the information provided to you is real
  • We make sure secretarial compliance for a transaction is taken care of, even if it sometimes means small delays in the closure process 
  • From a startup perspective, the platform provides an industry-standard open sourced term sheet, information on who is investing in the round, and the team helps founders understand the whole process, the legal terms and processes. We have seen that this actually holds founders in good stead not only as they progress along in their fundraising journey but also as they build strong, compliant businesses. 

We take pride in saying that we are with you and for you, whether investor or founder, through this whole process.

About a year ago, LetsVenture  launched the Angel AIF for investments and we have strived to ensure that you are aware of what you are getting into since this is a relatively new product.
Here’s a quick snapshot of what the SEBI regulation says on “accredited investors”: 

  • You must have a INR 2 cr net worth apart from primary residency and
  • Have either 10 years of experience or have done investments before or have been a founder who has turned into an Investor 
  • Or have a INR 10 cr net worth if you are investing as a body corporate
  • Lastly, you must commit to investing INR 25 lakh over 5 years via the Angel AIF

While a lot of this depends on self-disclosure, as an Angel AIF and as a company that prides itself on compliance, we ensure that: 

  • Investors know details about every investment 
  • Critical decisions on governance points are NOT fine print but called out specifically
  • LetsVenture receives consent from you (as an investor) for all transactions 
  • We document and number the legal paperwork for the fund
  • We comply by the number of investors in the scheme, i.e. 200. This compliance is also handled by the platform automatically
  • We work on the portfolio and update quarterly reports from your startups

The only thing I would like to leave you with is, “You get what you see, and we ensure what you see is correct. Compliant and complete.”

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