The Winpe Ignite Masterclass Series, in collaboration with AZB & Partners, provided a deep dive into three critical aspects of deal-making: Term Sheets, Governance in PEVC-backed Companies, and Investment Instruments. These sessions were aimed to equip the attendees with practical insights to navigate the complexities of deal-making in the dynamic PEVC landscape.

Each session concluded with an interactive discussion, allowing participants to engage directly with industry experts and gain real-world perspectives ensuring a tailored and insightful learning experience. The series was offered free of charge, reinforcing Winpe’s commitment to knowledge-sharing and capacity-building in the investment ecosystem.





Session 1: Term Sheets: A Practical Guide to Negotiating Deals
13 February, 2025, 06:00 PM - 07:00 PM

Session 2: Governance: Navigating complexities at PEVC backed companies
20 February, 2025, 06:00 PM - 07:00 PM

Session 3: Structuring Deals: Investment Instruments for PEVC
28 February, 2025, 06:00 PM - 07:00 PM

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Session 1

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Term Sheets
A Practical Guide to Negotiating Deals

Conducted by Divya Mundra, Senior Partner at AZB & Partners, the first session of Winpe Ignite Masterclass Series 01 was kicked off with Term Sheets, decoding the fine print of deal-making. From must-have clauses to negotiation hacks, attendees got the inside scoop on sealing the best deals.

The key takeaways from the session are:

• Types of M&A Transactions: M&A deals can be categorized based on the type of company (listed or unlisted), the percentage of stake being acquired (minority or majority), and the purpose of investment (strategic or private equity/financial investment). Additionally, transactions can involve business transfers or asset sales, impacting the structure and negotiation of the deal.


• Stages of a Deal: A typical deal goes through several stages: Structuring, Term Sheet, Due Diligence, Drafting and Negotiation of Transaction Documents, Execution, Closing, and Post-Closing. Each stage requires strategic planning and careful execution to ensure successful deal closure.


• Key Terms in Term Sheets: Term sheets outline the transaction structure, parties involved, valuation, and key rights and obligations. They are usually non-binding except for specific clauses like exclusivity and confidentiality, which are binding to protect sensitive information.


• Critical Transaction Documents: Essential documents include Share Purchase Agreement (SPA), Share Subscription Agreement (SSA), Shareholders’ Agreement (SHA), Business Transfer/Asset Purchase Agreement (BTA/APA), and Joint Venture Agreement. These documents govern the transaction details and post-closing obligations.


• Ancillary Documents and Agreements: Deals often require additional documents like Escrow Agreements, Assignment/Transfer Agreements, Employment and Non-Compete Agreements, and Shared Services and Transition Agreements to ensure smooth integration and risk mitigation.


• Strategic Considerations in Negotiations: Effective negotiation requires understanding the purpose of investment, valuation negotiation tactics, risk allocation, regulatory approvals, and exit rights. These strategic considerations help balance stakeholder interests and ensure a favorable outcome for all parties involved.

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Session 2

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Governance
Navigating complexities at PEVC backed companies

The second session, Governance in PEVC-backed Companies, conducted by Prerak Ved, Partner at AZB & Partners, unraveled the balancing act of investor rights, boardroom dynamics, and shareholder agreements. It was all about keeping the ship steady while ensuring everyone—founders and investors—stayed on the same page.

Here are the key takeaways from the session:

• Governance is Multifaceted: Corporate governance extends beyond legal compliance to include transparency, accountability, and ethical conduct. In India, governance has evolved through regulations and best practices. A strong framework improves business sustainability, investor confidence, and long-term success by ensuring responsible decision-making and risk management.


• Directors’ Duties and Liabilities: Directors in PE/VC-backed firms have statutory and fiduciary responsibilities under the Companies Act and other laws. Their duties can be individual or collective, and non-compliance can lead to civil or criminal liabilities. A clear understanding of these obligations is crucial for risk management and governance.


• Role of Nominee Directors: Nominee directors represent investor interests while fulfilling board responsibilities. They must balance these roles carefully, ensuring compliance with legal and governance norms. This dual responsibility often creates challenges, requiring them to align investor expectations with the company’s broader strategic and operational objectives.


• Complexities in Decision-Making: Nominee directors face conflicts between investor priorities and company objectives. Decisions must consider legal, regulatory, and ethical implications while maintaining compliance. Balancing these aspects requires strategic thinking, transparent communication, and sound judgment to ensure effective governance without compromising business sustainability or regulatory obligations.


• Risks and Liabilities in PE/VC-backed Companies: Directors are exposed to risks such as business failure, fraud, shareholder conflicts, and regulatory shifts. Liability may arise from compliance lapses or disputes. Awareness of these risks enables directors to safeguard themselves and the company through proactive governance and strategic decision-making.


• Risk Mitigation Strategies: To minimize liabilities, directors should enforce strong governance practices, maintain compliance, and document key decisions. Regular legal training, transparent stakeholder communication, and independent professional guidance help mitigate risks. Proactive governance ensures better preparedness for financial, legal, and reputational challenges in a dynamic business environment.

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Session 3

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Instruments
Structuring Deals: Investment Instruments for PEVC

The final session on Investment Instruments, Conducted by Divya Mundra, Senior Partner at AZB & Partners, dived into the toolbox of deal structuring, exploring equity, debt, and hybrid models. It gave out the ultimate playbook for crafting smart, risk-savvy investments.

Here are the key takeaways from the last session:

• Foreign Direct Investment (FDI) Considerations: Structuring deals requires assessing FDI rules, including sector-specific conditions, FDI percentage limits, and whether approval is required. Deferred payments, escrow arrangements, assured returns, and investor rights must also be carefully structured to comply with regulations. Key Investment Instruments: Investors can utilize various instruments such as equity shares, CCPS, CCDs, share warrants, OCDs, and RPS. Each has distinct regulatory implications, including voting rights, conversion terms, and classification as debt or equity for compliance purposes.


• Equity Share Issuance and Pricing: Equity shares can have differential voting and dividend rights, subject to shareholder and regulatory approvals. Pricing for preferential issues is governed by valuation norms, and foreign investors cannot receive assured returns or exit options within one year.


• Convertible Securities – CCPS & CCDs: CCPS offer fixed dividends and liquidation preference, with conversion linked to valuation reports. CCDs function similarly but provide fixed interest instead. Both instruments require upfront determination of conversion price for foreign investors and allow EBITDA-based adjustments.


• Debt-Linked Instruments – OCDs & RPS: OCDs and RPS are treated as debt for foreign investors and subject to ECB regulations, including restrictions on lenders, use of funds, and maturity periods. OCDs allow conversion flexibility, while RPS do not convert into equity and are typically redeemed at a premium.


• Share Warrants and Foreign Investment Restrictions: Share warrants grant rights to acquire securities at a predetermined price but do not provide voting or dividend rights. Foreign investors must pay at least 25% upfront, complete payment within 18 months, and adhere to pricing and conversion formula regulations.