Part 3: How to ensure the success of equity funding deal in a SME business? This is the third of the three-part learning program for a business to understand the importance of equity funding for business growth and financial turnaround. The three parts of the program are: 1. Strategic financial concepts for a promoter of technical background 2. Process of equity funding 3. Factors for success of equity funding deal This presentation tells what are the important factors to be considered while availing funding, how every deal changes with respect to sector, location, life cycle; what are the misconceptions about equity funding, precautions during the process, success and failure factors, etc.

1. APOHANTM
Day 3: Deal Success
Equity Funding for
Business Growth & Financial Turnaround- Success
APOHANTM CORPORATE CONSULTANTS PVT. LTD.
Where Businesses Realize Their Dreams!!!
A genuine business motivation delivers profitability, returns, stability, growth and sustainability!
Presented by: Arun Joshi
E-mail: arun.joshi@apohanconsultants.com
Ph. +91 9810481325
Website www.apohanconsultants.com
7/12/2020
APOHAN CORPORATE CONSULTANTS PRIVATE LIMITED
1
8th, 9th & 10th July ,2020| 11.00 a.m. to 12.45 p.m.
Organizer: Maratha Chamber of Commerce, Industry & Agriculture, Pune

2. APOHANTM
Section 1:
Important Aspect in
Business Funding
Equity, Debt, Grants & Schemes, DisciplineActions, Encashments.Customers, Suppliers, Cost Cutting,
BreathingEasy, ForeignFunds, Corporate Issues, Restructuring, M&a

3. APOHANTM
 Following is the list of the aspects or questions of the key considerations in the financing contracts:
1. Basis of eligibility: Whether the investment opportunity is analyzed on the basis of standard institutional rules or on
financial merit of the business; does the investor have ability & mechanism to understand business?
2. Rigidity of process: Whether the investor is reasonable and flexible enough to accommodate unimportant shortcomings
in the processing of application;
3. Rigidity of contract: Whether the investor is open for negotiation of the terms and conditions in the investment contract
or are the conditions very rigid;
4. Return: Whether or not a certain minimum guaranteed return, such as interest, is promised by the recipient;
5. Guaranteed return: Whether the rate of return to the investor is fixed or it is dependent on business performance;
whether there is an upper limit on profit shared;
6. Repayment: Whether the recipient business is required to repay the capital amount or not at all as in case of common
equity funding;
7. Time: What is the amount of time required for the disbursement of the funds from the first contact time or application
date;
8. Security: Whether the recipient requires to provide some property or asset as security at some ratio of the amount of
capital; what percentage of margin money is required;
9. Guarantee agreement: Whether the business is required to furnish one or more guarantees including other corporate or
personal guarantees;
7/12/2020 APOHAN CORPORATE CONSULTANTS 3
Business Funding Aspects (1/3)

4. APOHANTM
10. Cost: What is the one-time cost of raising the funds as a percentage of the amount raised;
11. Corruption: Is there corruption in the capital supplier institution?
12. Repayment flexibility: What are the flexibility is available in the repayment of the instalments of the original
amount and the returns;
13. Contract flexibility: Whether the investor is flexible to change the contract in due course of time looking at the
circumstances of the business;
14. Time flexibility: Whether the investor requires the business to be flexible in terms of expectations of capital
infusion timing?
15. Compliance: Whether the business requires to carry out a lot of statutory compliance activity to be eligible to
avail the capital;
16. Penalties: What are the various types of penalties in the financing contract;
17. Risk appetite: What is the risk appetite of the investor? Would he invest with known high risks? Unknown risks?
18. Performance security: Is the capital provider ready to take the entire risk of performance of the business? Or he
wants to secure some lower side?
19. Recourse: What is the financial recourse to the investor if there is incurable financial default, business failure,
insolvency, bankruptcy, etc.? Would it take away the control and ownership of the shareholders?
20. Willful default: What is the difference between treatment of willful default and performance related default;
7/12/2020 APOHAN CORPORATE CONSULTANTS 4
Business Funding Aspects (2/3)

5. APOHANTM
21. Duration: What is the duration for which the capital is provided;
22. Due diligence: What is the degree of due diligence at the time of sanction of amount;
23. Documentation: What is the documentation involved;
24. Discretion: Is there scope for individual discretion in the investment decision;
25. Amount: What is the amount that is being sanctioned vis-a-vis the requirement of the business;
26. Control: Whether there is dilution of control of the previous shareholders;
27. Ownership: Whether there is dilution of ownership of the previous shareholders;
28. Interference: Whether there is going to be interference in day-to-day operational management;
29. Expectation: What is the expected rate of return or the interest rate; whether it is normal, reasonable,
acceptable and achievable;
30. Synergies: Whether there are synergetic benefits of the association with the capital provider; Would the
financial expertise of the investor be useful for the business;
31. Instruments: How many variants of the instruments of funding are available;
32. Convertibility: Whether the instrument can be converted from one form to another form in due course of
time as per requirement;
33. Hardship: Would the investor appreciate a peculiar situation or a hardship of a business.
7/12/2020 APOHAN CORPORATE CONSULTANTS 5
Business Funding Aspects (3/3)

6. APOHANTM
Section 2:
High Level Context of M&A Deal

7. APOHANTM
M&A – Level of Decision Making
Persons/Entities
1) Promoters, shareholders
2) Chairman, Managing Director, CEO
3) Executive/non-executive directors
4) Independent directors
5) Resolution professionals
6) Heads of departments, CXOs
7) Lenders & investors
8) Trustees, nominees & guarantors
9) Key contractual clients / suppliers
10) Key decision makers & equivalent people
11) Mentors & influencers
Who wants to achieve a success & for what type of legal entity has a lot of significance in
deciding the course of action.
Their Organizations
1) Private/Public limited companies
2) Listed companies
3) MNCs, subsidiaries, branch offices
4) Limited liability partnerships
5) JVs, SPVs, Holding entities
6) Govt. department, PSUs
7) Proprietorships & Partnerships
8) Societies, trusts
9) AOPs, HUF, etc
10) Industrial associations
11) Investors

8. APOHANTM
M&A at different business cycle phase has different implication & objectives.
Following are the various stages of development of a business:
1. Pre-incorporation:
2. Proof of concept:
3. Before break-even:
4. After break-even:
5. Exponential growth phase:
6. Stable growth:
7. No growth:
8. Decline phase:
9. Revamping or refurbishment:
10. Business Turnaround:
Life Cycle Stages of Business & M&A
7/12/2020 APOHAN CORPORATE CONSULTANTS 8

9. APOHANTM
Business Nature & M&A
Legal types
o Proprietorships
o Partnerships
o LLPs
o Private limited
companies
o Public limited
companies
o Listed companies
o Societies (Trusts, NGOs)
o Cooperative societies
o Government
o Multilateral agencies
The nature of engagement changes substantially depending upon the legal nature, required type
of investor & place in value chain.
Place in value chain
o Manufacturers – OEM
o Technology providers
o Tier 1, Tier 2, Tier 3 component suppliers
o Raw material/commodity suppliers
o Machine tool suppliers
o Project companies
o PMC / AMC services, consultants
o Buyers’ industry in case of B2B
o Funding companies
o Traders
o Wholesalers
o Franchisees
o Retailers
o Business service providers – IT, manpower, logistics
o Integrated production
o Any other business model

10. APOHANTM
Sectors & M&A Deals
Infrastructure
Construction
Real estate
Roads & highways
Ports
Airports
Inland waterways
Water
Waste
Mining
Energy
Power
Telecom
Environment
Social Infrastructure
Education
Hospitality
Tourism
Health
Commodities
Steel
 Metals & alloys
Chemicals
Cement
Coal
Petroleum
Natural gas
Engineering
Civil
Mechanical
Electrical
Electronics
Instruments
Chemicals
Manufacturing
Automotive
Ship building
Air craft
Media & Entertainment
Publication
Film
Music
Event Management
Art industry
Information Technology
HW & networking
Software design
Web & app design
ERP
Call centres
BPO
Digital media
Social Media
Internet
Trade
Home Trade
Import
Export
Entrepot
Business Services
Communication
Banking
Insurance
Transport
Logistics
Distribution channel
R&D
Equity research
Surveys
Data analysis
Agricultural
Agriculture
Fishing
Dairy
Poultry
Horticulture
Wood
Tobacco
Paper
Other
Pharmaceuticals
Defence
Municipal services
Diversified
EPC
PPP
Other
SMEs, emerging technology companies are a rage among investors!
New Age Technologies
Blockchain
Artificial intelligence
Robotics
Automation
Drones
Big Data
Cloud
3D Printing
Immersive reality
Holography
Nanotechnology
Advanced materials
Electric vehicles
Hydrogen cells
Internet of Things
Renewables
Waste to power
Biomass to power
Genetics
FinTech EduTech
Collaborative Tech
Quantum computing
Smart cities
New age screens
LBS
Connectivity
7/12/2020
APOHAN CORPORATE CONSULTANTS PRIVATE LIMITED
10

11. APOHANTM
Section 3:
1. Why M&A
2. Misconceptions about M&A in
SMEs

12. APOHANTM
The Benefits From M&A Activities
◦ Increased scale of operation
◦ Economies of scale
◦ Brand goodwill
◦ Market share/leadership
◦ Access to new markets
◦ Enhanced market share
◦ New geographic presence
◦ Synergies of operations
◦ Tax, subsidy, incentive benefits
◦ Reduction in competition
◦ Reduction in pressure on prices
A well undertaken M&A can transform a company into a giant in future.
There are virtually unlimited benefits.
◦ Growth w/o new cash
◦ Settlement of liabilities, debts
◦ Financial turnaround of distressed assets
◦ Less overheads
◦ Ready made listed public form
◦ Infusion of money for growth
◦ New close stakeholders
◦ Removal of capability deficits
◦ Bulk buying advantage
◦ Enhanced creditworthiness
◦ Enhanced credentials for tenders
◦ Investment in upgradation, technology, R&D

13. APOHANTM
The Dilemma Between Growth & Control
 Smaller holding in a large, growing entity should be preferred over large holding of a small, stagnant entity
 Difference of opinion on current valuation is insignificant compared to future gain in total valuation
 Business growth is a dream of every businessperson
 Internal accruals are often not sufficient to fuel growth dreams
 Organic growth is slow, painful & uncertain
 Benefits of synergy are absent in organic growth
 Attachment of control even if competent partner is available is more for psychological satisfaction
 A wise management would choose growth over control
 The very purpose corporate structure is growth through capital participation
 Dilution of control may provide financial expertise for a technocrat
 Relationship with a rich entity may come handy in crisis
 Investment contracts can be designed to address many control expectations & concerns
 Complexity doesn’t make a professional reason to avoid M&A route
 Delegation can be done at market cost level & not control improves life quality
Sarpanch of a village?
Or
Minister in central cabinet?

14. APOHANTM
Timing of M&A – Bargaining Power of Seller
Financial Distress
 Supplier payment defaults
 Working capital defaults
 Bank NPA
 Lok Adalat
 Company Law Board
 Strategic debt restructuring
 SARFAESI, DRT, DRAT
 Asset reconstruction
 CIRP under IBC process /NCLT
 High Court/ Supreme Court
 Viable loss making business
 Unviable business
 Business under liquidation
The ability of company to bargain valuation & dictate terms is least when business is foreseeing
liquidation & the highest when the business is growing at fast pace with very high margins & low risks.
Introvert Businesses
 Not able to take decisions
 Don’t know right time to grow
 Waiting to fail but don’t know
that
 Loosing good opportunity
 No timely succession planning
 No horizontal or vertical
integration
 Surviving on luck
 Surviving on relationships
Growth Financing Requirement
 WC for 100% capacity utilization
 Capacity expansion
 Product portfolio expansion
 Geographical expansion
 Vertical – forward & backward
expansion
 Horizontal or lateral expansion
 Inorganic growth
 New greenfield or brownfield project
 New product development, technology,
R&D
 New business structure, contract
structure
 Diversification
 International expansion

15. APOHANTM
Link:
Financial health & M&A timing (25
indicators)
https://www.apohanconsultants.com/financial-strategy/deteriotaring-
financial-performance/

16. APOHANTM
Section 4:
Success of Deal

17. APOHANTM
The Supreme Misconception: Die-Hard Question of SMEs:
Do You Have an Investor?
A Bigggg Yes… Provided that
◦ the management has a record of financial
integrity;
◦ the company has sound competence in its
technology, products, services, markets &
competition & the trends in them
◦ There is a priced demand for the products that
can create sustainable profits
◦ There is in place or can be put in place marketing
capability & marketing infrastructure
◦ There is possibility of returns on investment in
proportion of risks
◦ The offer to be made to the investor is
reasonable, rational.
◦ There is readiness to undergo the rigorous
M&A process documentation.
No investor invests crores of rupees because they merely KNOW the M&A advisors like us.
An investment is always based on the business merit alone!
Business & Investor
◦ Doing business is very complex & difficult & doing
financial investment is relatively very easy.
◦ The number of eligible businesses is very low & the
number of eligible investor is very high.
◦ Typically, the investment requirement of a business is
relatively low.
◦ The ticket size of investment of many investors is very
high.
◦ There is a lot of money chasing a very few good
opportunities.
◦ Investible money is not a rare commodity in the world.
◦ The alternative investment opportunities very less
lucrative & potent.
◦ Businessmen think investors are rare because all the life
they were looking only for clients, not investors.

18. APOHANTM
1. Market, marketing infrastructure, client network and marketing vision – Go/NoGo
2. Technical, technological and operational merit of a business – 80% weight
3. Clarity of M&A objectives, management maturity
4. Past financial performance ( Except for stressed funding) – Don’t worry
5. Financial integrity, passion of the promoters/directors, USPs – Extremely Crucial
6. Financial viability of business & identification/communication of all future risks
7. Existence of all internal documentation, merits claim documents
8. Readiness of quality transaction documentation through professionals
9. Readiness to (& knowledge about) undergo the rigorous M&A process (& not compliances)
10. Practical expectation of the M&A time-frame (…)
11. Provision for the total M&A transaction cost
12. Focus on value addition (growth & turnaround) in future over present
13. Rationality and reasonability of the valuation/offer to the investor
14. Experienced, capable & networked M&A consulting infrastructure/ecosystem
15. Business vision to assess the benefit in retrospect
7/12/2020 APOHAN CORPORATE CONSULTANTS 18
Key Deal Success Factors
SME’s first question is the last question!

19. APOHANTM
Three Types Of M&A Failures
1. FAILURE OF DEAL CLOSURE:
2. FAILURE OF HARMONY BETWEEN MANAGEMENTS:
3. FAILURE OF MERGER INTEGRATION:
7/12/2020
APOHAN CORPORATE CONSULTANTS PRIVATE LIMITED
19

20. APOHANTM
1. Brokers appointed by SMEs as M&A consultants
2. No knowledge of equity funding market & process
3. Misconceptions about equity
4. No financial model, no investment schedule
5. No deal structure
6. No financial contract
7. No clear offer
8. No 360 degree expertise – MBA strategy, MBA finance, MBA marketing, Sector expert, Accounting
expert, Taxation Expert, Secretarial expert, Business lawyer, Valuation expert
9. No access to Big 4 M&A consultants
10. No communication infrastructure
11. No network of investors
12. No internal documents
13. No transaction documents
7/12/2020 APOHAN CORPORATE CONSULTANTS 20
Reasons for Deal Failure for Deserving SMEs
Merchant bankers or Investment bankers who are basically consultants underwrite IPOs!
Now understand the importance of “merit of business” from investment perspective!!

21. APOHANTM
Get Rid of Misconceptions
https://www.apohanconsultants.com/mergers-acquisitions/reasons-why-
equity-funding-or-ma-is-not-common-among-indian-smes/

22. APOHANTM
 Lack of awareness of the advantages of equity
 Absence of an organized equity market
 Lack of business growth appetite
 Insignificant & risky segment for prestigious M&A
advisory companies
 Lack of investor community access
 Too much advertising of business alliance failures
 Confusion in choice of growth & management control
 Requirement of disclosure of critical business
information
 Selling business – stigma notion
 Hectic documentation & information collection
 Integrity of accounts
 Poor confidence or hope for getting equity
 Unsuitable legal form of business
Reasons Why Equity Funding Or M&A Is Not Common
Among Indian SMEs
 No independent directors & stakeholders
 Insufficient deal preparation
 Reliance on audit & tax professionals for M&A work
 Lack of time with SME management
 Complex chain of brokers & no direct engagement with M&A
consultants
 No single window M&A solution companies for SMEs in the
market
 M&A communication is difficult & complex
 Notion of inferior side
 Higher transaction cost
 Resistance for issuing consulting mandate
 No appreciation of time-frame
 Unreasonable expectation of valuation
 Unclear equity contract conditions

23. APOHANTM
Beware of Brokers!
 The brokers shouldn’t be taken as M&A consultants!!!
 They don’t know M&A process details and may reveal your M&A intent to wrong entities. A company
rumoured to be sold risks business relations
 They don’t know many investors & even if they know, no professional investor invests crores of rupees on
their personal recommendation.
 They make difficult getting an investor as the investor requires direct mandate from the business/seller to
the M&A consultants.
 Investor gets put-off by higher brokerage charges as they are ultimately paid by the company.
 Brokers increase cost of acquisition of finance without much contribution in deal making, documentation,
trust building,
 They delay M&A closure as it takes them a lot of time to make an agreement, decide payment sharing, etc
as they don’t do this full time.
 They accept any terms & conditions & that is why they are wrongly perceived as very lucrative M&A.
A decent broker would charge a nominal referral fee.
A full-fledged M&A services company has immense investor
network (as well)!!!

24. APOHANTM
Importance of Investor Perspective
https://www.apohanconsultants.com/financial-strategy/perspective-of-an-equity-
investor-in-financing-a-private-business/

25. APOHANTM
Perspective of an equity Investor in financing a private
business
RISK OF BUSINESS
MANAGEMENT QUALITY ASPECT
LIQUIDITY ASPECT
TERM ASPECT
CONTROL ASPECT
ENTRY PROCESS
SECTOR & LOCATION ASPECT
TICKET SIZE ASPECT
POTENTIAL/VALUATION & OFFER ASPECTS
CONTRACTUAL ASPECTS
Perspective Of An Equity Investor In Financing A
Private Business

26. APOHANTM
Section 5:
Economics of Equity
Why you should not worry about equity funding!

27. APOHANTM
Types Of Business Transactions
7/12/2020 APOHAN CORPORATE CONSULTANTS 27
Business & Non-
business
Transaction
Investment
Transaction
Capital Transaction
Operational
Transaction
1. Strategic transactions
2. Sale of strategic assets
3. Sale of shares or
securities
4. Existing people
transactions (buyback,
Rights issue, Bonus)
5. Mergers and acquisitions
6. Business restructuring, financial
restructuring
7. Joint ventures
8. Succession planning/ management
outsourcing Lease, license, royalty,
sub-contracting, trading, etc.

28. APOHANTM
7/12/2020 APOHAN CORPORATE CONSULTANTS 28
Order of Liquidity
Industrial goods
A shop
A Listed company
Piece of art
Real estate
A nuptial knot aspirant
Private Limited business
Order of liquidity
Cash
Gold
Bank balance
Listed shares, bonds, units
FMCG goods
White goods
Commodities

29. APOHANTM
Savers Financial
Intermediaries
Borrowers
Economics of Equity (1/5)
Equity
Equity means no guaranteed
return and no security of
the investment as well
Debt
Debt means guaranteed,
fixed return with all possible
security
Savers save money in two formats
• Through
financial
intermediaries
• NBFC’s
• Banks
• Lends money
to business
• Lends the
money to
customers of
business
Savers save
money
Debt
•Debt acts as the low cost resource of capital for
business
•Debt is redeemed in a timely fashion providing
financial leverage to the businesses

30. APOHANTM
Economics of Equity (2/5)
Customers money converted into profit
reserves or equity of the businesses
Interest paid to
secured lenders
is very low
Lends money in the form of
debt with high rate of interest
Debt creates
equity (profit)
for banks
Note:
• Directly Investing in the business will give high returns
• Lending is intrinsically in unattractive
• If your business is having high potential, don't worry about availability of equity capital
• Interest to saver < lending rate of banks to businesses < return on capital employed in business

31. APOHANTM
 Risk perception of business
1. The tendency to use money bank
deposit is more because of risk
perception of business
2. Much of the risk perception is out of
absence of laws, regulatory
framework, absence of
documentation, absence of network,
lack of knowledge of business, etc
rather than the actual risk of the
business
3. It is only the higher risk perception
that keeps the debt market live.
Economics of Equity (3/5)

1. When the risk of the savers is taken care
of, the tendency to lend gradually gets
converted into tendency to invest in
equity
2. Equity capital can be very easily mobilize
3. Loans can be easily liquidated
4. Relative it is very difficult to liquidate
equity
5. The intrinsic tendency of investor if to
invest in a high return opportunity
provided that his concerns regarding risk
are taken care
6. It is not the investment that is in
demand, but it is the quality investment
opportunity that is in demand.
 How to lower the risk perception?
1. Compliances
2. Observance of laws of the land
3. Transparent accounting
4. Business documentation & records
5. Corporate policies
6. Substantiation of the claims
regarding the strengths of the
company
7. Financial integrity
8. Credit rating
9. Professional business management
10. Track record of financial
performance
11. Risk management

32. APOHANTM

1. FDI is equity investment in India by foreign companies
2. They bring in only 30% off capital requirement from
abroad
3. 70% capital cost and working capital is mobilized from
banks in India
4. They remit the profits that they make in India
5. In comparison with the actual money they brought in,
the remittance is very high and it affect the current
account balance of the country
6. As the value of FDI business increases over time as the
business becomes bigger, technically there is a
possibility that there is much higher capital outflow
from India
7. So why do we need FDI to mobilise our own saver's
money into business?
8. The answer is: They have the capability to make a
company equity investment worthy for rapid inorganic
expansion
Economics of Equity (4/5)

9. Their companies are investment worthy in their
own countries
10. They make their subsidiaries or joint ventures in
India investment worthy
11. Those Indian companies who are already a very
good professional setup attract FDI and grow with
them
12. The company's left out cannot stand their
competition in future
13. There are respectable local exceptions which are
run as professionally as the companies in the
developed countries, but these examples are very
few
14. Maximum SMEs always remain small, never
become even listed small caps, forget being a giant
MNC diversified conglomerate, as they never work
on improving their investibility

33. APOHANTM
1. Business is all about capability to make profit from operations taking care of all technical,
technological, operational, marketing abilities coupled with investibility infrastructure and it has
nothing to do with how much money you have in your own pocket to do what you want to do.
2. Of course, you need to have money to prepare a workable project plan, to do the initial preparatory
work & and the cost of investibility infrastructure
Economics of Equity (5/5)

34. APOHANTM
Section 6:
Key M&A Types
https://www.apohanconsultants.com/mergers-
acquisitions/#classificationofmanda

35. APOHANTM
A. Mergers & Acquisitions (1/3)
Financial turnaround
of distressed business
 Non-performing assets
 Financial turnaround
 Business Restructuring
 Financial restructuring
 Asset reconstruction
 Bank NPA advisory
 IBC /CIRP/SARFAESI Advisory
Business growth
through equity funding:
 Equity funding for growth
initiatives
 Equity funding for new projects
 Equity funding for working capital
 Inorganic expansion acquisitions
 Strategic equity investment
 Financial equity investment
 Buy-side advisory
M&A for
Retiring businessmen:
 Succession planning
 Management outsourcing
 Death will management
 Sellout advisory
APOHAN CORPORATE CONSULTANTS PVT LTD WWW.APOHANCONSULTANTS.COM

36. APOHANTM
A. Mergers & Acquisitions (2/3)
International business
 India entry strategy
 Initial public offer
 ADR GDR
 JV through Foreign direct
investment
 Cross border deals
 Overseas direct investment
Special business alliances
 Local Indian equity joint venture
 Contractual joint venture
 Franchisee contract
 Lease contract
 License agreement
 Royalty contracts
 Consortium for tender
 EPC alliance contracts
 PPP alliance for infrastructure
Combinations & divisions
Mergers
Acquisitions
Demergers
Sale of strategic assets
Asset sale
Slump sale
Sale of shares
Share transfer
Sell side advisory
Buy side Advisory
APOHAN CORPORATE CONSULTANTS PVT LTD WWW.APOHANCONSULTANTS.COM

37. APOHANTM
A. Mergers & Acquisitions (3/3)
Management of
company control
 Cross holding mergers and
acquisitions
 Differential voting rights
issue
 Control deals
 Crowd funding
 Core investment company
management
Discreet services
 M&A Deal structure
 Deal advisory
 M&A costing
 Financial models
 Business transfer contracts
 M&A negotiations
 Corporate process
 M&A taxation
 Investor finder services
 M&A counselling
Corporate transactions
 Buyback
 Bonus issue
 Rights issue
 Sweat equity
 ESOPs
 Private placement
 Preferential allotment
 Dividend policy
APOHAN CORPORATE CONSULTANTS PVT LTD WWW.APOHANCONSULTANTS.COM

38. APOHANTM
Section 7:
Types of investors
https://www.apohanconsultants.com/mergers-
acquisitions/#classificationofmanda

39. APOHANTM
Types Of
Financial
Investors
• Friends, relatives & family:
• Sweat equity (executive directors and key professionals):
• ESOPs (employees):
• Seed investors:
• Angle investors:
• Simple agreement for future equity (SAFE) investors:
• The unknown, unmet general citizen investor (Crowdfunding):
• Venture capital fund (VC Investors):
• Private equity fund (PE investors):
• Family offices (The rich family investors):
• High net worth individual (HNI) Investors:
• Non-resident Indian (NRI) Investors:
• Asset Management Companies (Mutual Funds):
• The various taxpayers as Investors:
• Investment trusts as Investors (REITs & InvITs):
• Investment bankers as the Investors:
• Qualified institutional buyers (QIBs) as Investors:
• NBFC core investment company (CIC) Investor:
• Hedge Fund Investors:
• Sovereign wealth fund (SWF):
• Pension Funds
• Fund of Funds:
• Alternative investment funds (AIF):
• Foreign direct investor (FDI):
Types of Investors

40. APOHANTMExercise
 Would you or would you not take equity funding?
 What is reason for the same?
 Do you think that your business has sufficient merit to get equity from
third-party independent investor?
 Do you think that your businesses has everything to attract an investor?
 Are you ready for rigorous M&A process?
 What is the most compelling factor in your business that will make an
investor to invest in it?
 What is the valuation of your company? (Do you know it?)
 Are you psychologically open to work with independent people as your
co-directors?
 Have you identified companies you like to do M&A with?
 What are the synergies?
Evaluation method…
 Rating on 1 to 10 basis
 No reference to financial
statements
 No advice of any officers, etc
Send answers to:
Arun.joshi@apohanconsultants.com,
Shailesh.waghmare@apohanconsultants.com
Pavan.kale@apohanconsultants.com

41. APOHANTM
Question & Answers

42. APOHANTM
Contacts
Thank you!
Contact Person Arun Joshi Shailesh Waghmare
E-mail arun.joshi@apohanconsultants.com Shailesh.waghmare@apohanconsultants.com
Phone +91 20 25650005 +91 20 25650005
Mobile +91 9810481325 +91 96500 13256
Website www.apohanconsultants.com
Address Office no. 11, 1st floor, Shriram Complex, Model Colony Rd.,
Shivajinagar, Pune, Maharashtra, India – 411016
APOHAN CORPORATE CONSULTANTS PVT LTD WWW.APOHANCONSULTANTS.COM