CFE213 | Foundations of Equity Fundraising

This course is a foundational course in private equity and venture capital transactions. It is the next step to corporate law courses taught in a law school. Students enrolling in this course should have completed their compulsory corporate law courses. Given the robust private equity/ venture capital environment in the world today, corporate lawyers, even the junior-most of them, are required to know and understand the basics of fundraising. This course would introduce the students to the fundraising process and the lawyer’s role in navigating through it. The course is approached with one question in mind: “What would I like an associate assisting me at a law firm know, so that while helping me on deals she will be a force multiplier?”

The template of a term sheet for an equity fundraise will form the basis of most of the discussion and analysis. Students will also be exposed to the formats for share subscription agreement, shareholders’ agreement, employment agreements and corporate secretarial documents for such a fundraise. The terms of a standard term sheet will be discussed in some detail and thereafter be mapped to the remaining agreements and documents mentioned above. The course is designed to provide an introduction to the terms of an equity fundraise and will encourage the students to think through the motivations of the parties (i.e. the new investor, existing investor, investee and promoters of the investee) for negotiating each of the terms. Since this course is an introductory course to fundraising, nuances of drafting, reviewing and negotiating the agreements mentioned hereinabove have been excluded.

The course will be a combination of lectures and Socratic discussion. The class will also have some
activities such as calculating a capitalisation table and drafting some clauses of a term sheet.

The course will be divided into 4 modules, namely,
(i) introduction to fundraising and related agreements;
(ii) understanding clauses of a term sheet;
(iii) overview of the shareholders’ agreement, share subscription agreement and employment
agreement for the promoters; and
(iv) corporate secretarial process for private placement.