Building a VC Firm to Last | Hussein Kanji from Hoxton Ventures

In this episode you will learn:

[00:00:00] Introduction

[00:02:42] Mehak explains startup convertible notes.

[00:05:00] Improvements and challenges in Indian startup regulations.

[00:06:24] Foreign fundraising challenges and issues.

[00:09:24] Angel tax impact on startups and investors.

[00:11:46] Impact of recent FinTech regulatory changes.

[00:13:24] Data Protection Bill overview and startup cost implications.

[00:15:06] Crowdfunding platforms in India.

[00:17:51] Pandemic's impact on fundraising and startup valuations.

[00:19:00] Mehak on ESG importance in Indian startups.

[00:21:24] ESG due diligence and compliance indemnities.

[00:23:00] Explanation of indemnity in negotiations.

[00:25:50] Fundraising terms becoming founder and investor-friendly.

[00:26:55] Discussion on equity, preference shares, convertible notes, and debentures.

[00:28:46] Mehak on equity-debt debate and finding the right balance.

[00:29:54] Factoring vs. Debt Instruments: SAS companies and cash flow.

[00:30:47] Investor-Friendly Terms: Founder lock-in and escrow securities.

[00:33:23] Key Investor Rights: Preemptive, anti-dilution, and exit rights.

[00:34:46] Impact of Governance Issues: Control over founders and compliance focus.

[00:36:31] Founder's Response to Compliance Challenges: Establishing compliance departments and seeking advice.

[00:37:32] Compliance Verticals: ESG, tax, financial, data, and IP compliance.

[00:40:33] Challenge of Compliance in India: Navigating through myriad laws.

[00:41:41] Improvements in Contract Enforcement: Faster judicial remedies.

[00:43:18] Streamlining Labor Laws: Indian government's efforts through labor codes.

[00:45:50] Contractual Compliance: Focus on watertight contracts.

[00:47:38] Compliance Verticals: ESG, tax, financial, data, and IP compliance.

[00:49:46] Investor Checks and Balances: Emphasizing checks and balances.

[00:50:59] Post Fraud or Embezzlement Remedies: Founder clawback and exit clauses.

[00:53:19] Directors and Officers Liability Insurance: Protecting investor representatives.

[00:55:16] Positive Trend: Increasing importance of due diligence and compliance.

About

A seasoned corporate lawyer with 15 years of experience in law firms and in-house legal departments, Mehak has led strategic legal advice for both large, established companies and fast-growing tech startups, as well as investors. She has overseen intricate restructuring and M&A transactions, from orchestrating contract drafting and negotiations to delivering corporate advisory services and managing real estate deals. Her expertise extends beyond practice areas to include sector-specific advice in a wide range of fields, such as FMCG, manufacturing, technology/digital, sports, food, telecommunications, entertainment, e-commerce, and retail. She is a recipient of prestigious awards, including the ET Prime Women Leadership Award 2021, Asian Legal Business India Rising Star 2021, FORBES Under 40 Top General Counsel 2020, and the 40 Under 40 Rising Star Award by Legal Era 2020. Mehak regularly engages with industry and economy in forums and media such as Mint, Business Standard, and News18.

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Understanding VC is a podcast that provides founders with the knowledge and resources they need to understand venture capital. Our goal is to create the best and most comprehensive resource on venture capital on the internet, so that founders can make informed decisions about their businesses and secure the funding they need to succeed.