Startup Law Videos - Key elements in a legal startup term sheet [Part 1]

Before starting one's own venture in India, the land of opportunities, it is imperative to keep a few things in mind. It is important for you to have knowledge about a few elements before putting pen to the paper.

Liquidation preference clause : A liquidation preference clause protects the investor if a liquidation event is triggered. It explains how the money is distributed to the investor in times of liquidation of the company, asset sale, merger, consolidation or any other reorganization resulting in the change of control of the startup.

Participating Right : Participating right refers to the right of the investor by which the investor claims not only the investment he has in the startup but also the shares he holds in the company if a liquidity event is triggered or any of the events mentioned in the above point takes place.

Advocate Dhruv Suri can be consulted for further information at http://lawrato.com/advocate-dhruv-suri or by calling 09599-000-555.