Funding round support: terms, ownership and closing
Funding and transactions
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On demand
A funding round changes ownership, investor rights and the company’s future obligations. The investment amount and headline valuation are only part of that change. An option-pool increase, convertible instrument or revised closing condition can alter the result for founders and existing shareholders.
TheTaxCo handles the financial, legal and compliance work around an investment round through its expert team, from ownership calculations and transaction documents to closing, filings and post-closing follow-up.
Model the terms before they become commitments
We begin with the present ownership, outstanding options and convertible instruments, the proposed investment and the latest term sheet. If terms are still being discussed, scenario calculations can help you understand the alternatives.
Pre-money value describes the agreed value before the new investment; post-money value includes the new money under the stated assumptions. The ownership calculation must also specify whether an option pool is included before or after the investment and how existing convertible instruments are treated.
A cap table should show shares and percentages on consistent bases. Issued shares, options available for grant, granted options and shares on conversion are not interchangeable. We identify each category and explain the fully diluted presentation used in the negotiation.
Terms affecting economic outcomes extend beyond percentage ownership. Conversion provisions, preference rights, anti-dilution terms, transfer restrictions and investor approvals need to be read with the financial model. Legal advisers address the contractual meaning and drafting; the financial work shows the consequences of the terms being considered.
Keep the documents and numbers aligned
A changed valuation can affect the price per security and number issued. A changed option pool can affect founder dilution. A change from a primary investment to a secondary purchase changes who receives the money. Those changes should be reflected consistently in the cap table, financial schedules and transaction documents.
Stage | Financial and record work that can be included |
|---|---|
Terms under discussion | Ownership scenarios, funding requirement, instrument comparison and questions for the advisers |
Diligence | Reconciled financial schedules, responses supported by records and tracking of unresolved issues |
Pre-closing | Conditions checklist, final ownership calculations, amount and recipient of each payment, required approvals |
Closing | Reconciliation of the agreed subscription or purchase with actual receipts, executed documents and securities actions |
Post-closing | Updated ownership records, agreed reporting actions, investor information obligations and remaining conditions |
We carry the transaction through these stages and track the decisions and documents needed from each party. Diligence readiness addresses the preparation needed where financial or company records are incomplete.
Establish the legal route and sequence
The company, instrument and investor determine the approval and reporting requirements. Sections 42 and 62 of the Companies Act are relevant to particular securities offers and further share issues; they should not be treated as a single checklist applying identically to every round. Companies Act
Foreign investment adds a separate examination of eligibility, entry route, pricing, payment and reporting requirements. Receiving money, issuing securities and completing a report are distinct events. FEMA and RBI reporting support addresses those dependencies for a round involving foreign investment.
We agree the sequence with the company’s authorised decision-makers and advisers before a proposed closing. A signed term sheet does not by itself prove that all approvals, issue steps or conditions have been completed.
Deliverables and records
You receive a reconciled current cap table, investment scenarios, final ownership workings, a financial information pack, a closing checklist and a schedule of post-closing responsibilities. Each version identifies the terms on which it is based.
The initial records usually include incorporation and ownership information, relevant shareholder agreements, option and convertible terms, recent financial statements, the proposed funding amount and any term sheet. Detailed evidence requests follow the actual structure; unrelated sensitive records need not be circulated simply because a generic diligence list mentions them.
The timetable depends on the quality of the records, negotiation changes, valuations, approvals, banking requirements and external advisers. The engagement specifies preparation milestones and how additional rounds of changes will be handled. It cannot promise that an investor will commit or complete by a particular date.
Can you support investor discussions?
Yes. Our experts prepare the financial information, analyse proposed terms and participate in discussions to explain the transaction and address questions. The investor makes its own decision on whether and on what terms to invest.
Can you help before a term sheet exists?
Yes. Ownership scenarios, the funding requirement and preparation of financial information can be useful early work. We identify the assumptions so exploratory figures are not mistaken for negotiated terms.
Does the assignment include drafting the shareholder agreement?
Yes. The legal experts on the engagement prepare and review the transaction agreements, working with the financial and tax team so the documents match the approved ownership calculations and commercial terms.
What happens after the money arrives?
The receipt is reconciled with the agreed transaction, and the remaining issue, record and reporting actions are tracked. The assignment closes against the agreed deliverables rather than treating a bank credit as proof that every obligation is complete.
Email TheTaxCo, message us on WhatsApp or book a call. Share the entity, approximate round size, investor residency and present stage: exploratory discussion, term sheet, diligence or closing.