India: Venture Capital

The Bangalore bench of the Income Tax Appellate Tribunal (‘ITAT’) has held that ESOP expenditure cross-charged by a foreign holding company to its Indian subsidiary is allowable as a deduction under section 37(1) of the Income-tax Act, 1961 ('Act'). The Tribunal reiterated that ESOP discount constitutes employee compensation and gives rise to an ascertained liability during the vesting period and that the possibility of future forfeiture, non-exercise of options, or issuance of a valuation report after the financial year-end does not render the liability contingent or hypothetical.

The term sheet is usually treated as the moment the commercial bargain is struck. The valuation is agreed, the investment amount settled and the investor’s percentage fixed. The parties negotiate a board seat, a liquidation preference and anti-dilution protection, the term sheet is signed, and the deal moves into definitive documentation.

India’s venture-capital ecosystem is entering a new regulatory phase. For much of the last decade, angel investing operated as the bridge between entrepreneurial networks and institutional venture capital.

A down round is a funding event where a company raises fresh capital by issuing new shares at a price and a valuation that is lower than what investors paid in the preceding rounds.

Starting a business is often associated with registration forms, incorporation documents and compliance procedures. However, successful entrepreneurs increasingly understand that launching a company requires...

Sophisticated investors investing in India are no longer required to settle for the fund. Increasingly, they want the deal, i.e., the specific, high-conviction opportunity sitting inside the fund’s portfolio.

The assessee was engaged in the business of manufacturing goods and providing services.

While institutional investors, global Private Equity (‘PE') giants, and Venture Capital (‘VC') funds continue to capture most of the direct investment market, over the past few years...

Blended finance is a structuring approach that uses catalytic capital from public or philanthropic sources to improve the risk–return profile of investments...