Letter Of Intent Venture Capital for India

Letter Of Intent Venture Capital Template for India

A Letter of Intent for venture capital investment under Indian jurisdiction serves as a preliminary agreement documenting the proposed terms and conditions of a venture capital investment in a target company. This document outlines key commercial terms including investment amount, valuation, equity stake, and primary conditions while establishing a framework for due diligence and subsequent negotiations. It typically includes both binding and non-binding provisions, adhering to Indian corporate law and SEBI regulations, while providing a structured pathway toward a definitive investment agreement.

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What is a Letter Of Intent Venture Capital?

A Letter Of Intent Venture Capital is a crucial preliminary document used in the Indian venture capital ecosystem to formalize the initial understanding between investors and target companies. It serves as a roadmap for the proposed investment, typically issued after initial discussions but before detailed due diligence and final documentation. The document needs to comply with Indian regulatory requirements, including the Companies Act 2013, SEBI regulations, and FEMA guidelines when foreign investment is involved. It outlines essential terms such as investment amount, valuation, exclusivity period, and confidentiality obligations, while clearly distinguishing between binding and non-binding provisions. This document is particularly important in India's dynamic startup environment, where it helps establish serious intent while maintaining flexibility for both parties to negotiate final terms based on due diligence findings.

What sections should be included in a Letter Of Intent Venture Capital?

1. Date and Parties: Opening of letter identifying the venture capital firm and target company, including registered addresses

2. Introduction: Brief statement of intent to invest and purpose of the letter

3. Project Background: Brief description of the target company, its business, and the proposed investment opportunity

4. Key Investment Terms: Proposed investment amount, valuation, equity stake, and type of securities to be issued

5. Use of Funds: Intended purpose and allocation of the investment funds

6. Due Diligence: Scope and process of the proposed due diligence investigation

7. Exclusivity Period: Duration during which the company cannot seek or negotiate with other investors

8. Confidentiality: Terms regarding the confidential treatment of information exchanged

9. Timeline: Proposed schedule for due diligence, documentation, and closing

10. Non-Binding Nature: Clear statement about which provisions are binding and non-binding

11. Closing: Signature blocks and acceptance provisions

What sections are optional to include in a Letter Of Intent Venture Capital?

1. Key Personnel Commitments: Used when requiring specific commitments from founders or key employees

2. Conditions Precedent: Include when there are specific conditions that must be met before proceeding with the investment

3. Break Fee: Used when parties want to include provisions for compensation if either party backs out

4. Regulatory Approvals: Include when the investment requires specific regulatory clearances

5. Corporate Governance: Used when preliminary board composition or voting rights need to be outlined

6. Anti-dilution Rights: Include when protecting against future dilution is a key concern

7. Cost Coverage: Used when specifying how transaction costs will be allocated

What schedules should be included in a Letter Of Intent Venture Capital?

1. Term Sheet: Detailed summary of key commercial and legal terms of the proposed investment

2. Cap Table: Current and post-investment shareholding structure

3. Timeline Schedule: Detailed timeline for completion of due diligence and transaction closing

4. Due Diligence Checklist: List of documents and information required for due diligence

5. Key Financial Metrics: Summary of important financial information and projections

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

India

Publisher

Genie AI

Document Type

Letter of Intent

Cost

Free to use
Clauses
Relevant Industries

Technology

E-commerce

Healthcare

FinTech

EdTech

Clean Technology

Software as a Service

Consumer Internet

Artificial Intelligence

Biotechnology

Digital Media

Enterprise Software

Mobile Applications

Renewable Energy

AgriTech

Relevant Teams

Legal

Finance

Investment

Corporate Development

Compliance

Due Diligence

Risk Management

Business Development

Corporate Secretarial

Executive Leadership

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Managing Partner

Investment Director

General Counsel

Corporate Lawyer

Investment Manager

Due Diligence Officer

Company Secretary

Fund Manager

Startup Founder

Business Development Director

Legal Counsel

Compliance Officer

Investment Analyst

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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