Capital raising

Most fundraises that fail do so before the first investor meeting. The business is not ready, the numbers do not tie together, or the founders approach the wrong investors. A well-run raise for an Indian private company typically takes four to nine months, and the first two are spent on preparation.

Very few private investments in India are made in plain ordinary shares. Most use instruments that sit between debt and equity: preference shares and debentures that pay a return or rank ahead of founders today, and convert into equity later. Understanding these “quasi-equity” instruments helps founders negotiate better terms and helps investors see what protection they are really getting.

The cheapest-looking capital is rarely the cheapest in the end. Debt costs a known rate of interest; equity costs a share of everything the business will ever be worth. The right choice depends less on today’s price than on how predictable your cash flows are and how much control you want to keep.