Lawcify

The journey from funding to an Initial Public Offering (IPO) follows a structured path similar to global markets but with specific regulatory requirements governed by SEBI (Securities and Exchange Board of India). Here’s a breakdown of the key stages: --- 1. Pre-Seed Stage (Bootstrapping & Early Capital) The startup is in the ideation phase, often funded by founders, friends, or family. Focus is on developing a Minimum Viable Product (MVP) and market research. Funding sources: Personal savings, grants, startup incubators, and accelerators. --- 2. Seed Stage Startups raise their first external funding from angel investors or seed funds. Funds are used for early-stage product development, hiring, and market validation. Investment instruments: Convertible notes SAFE (Simple Agreement for Future Equity) Equity-based funding --- 3. Series A Funding Institutional investors (venture capitalists) enter, typically requiring proof of traction (users, revenue, market demand). Funds are used for scaling operations, expanding the team, and refining the business model. Investors: Indian VC firms (e.g., Sequoia Capital , Accel , Artha Venture Fund, Nexus Venture Partners) and global investors. --- 4. Series B, C, and Growth Stages Focus on rapid growth, geographical expansion, product diversification, and deeper market penetration. Investors include larger VCs, private equity firms, hedge funds, and corporate investors. --- 5. Pre-IPO Preparation (Late-Stage Growth & Compliance) The company now aims for an IPO and starts regulatory and financial preparations. Steps include: 1. Hiring investment banks (merchant bankers) to underwrite and manage the IPO. 2. Financial audits & compliance with SEBI and Companies Act regulations. 3. Corporate restructuring (if needed) to meet listing criteria. 4. Filing Draft Red Herring Prospectus (DRHP) with SEBI. 5. Roadshows & investor presentations to attract institutional buyers. Common Pre-IPO Investors: Private equity firms, sovereign wealth funds, and large institutional investors. --- 6. IPO (Initial Public Offering) Process Once SEBI approves the Red Herring Prospectus (RHP), the IPO is launched. Shares are listed on BSE and/or NSE. The IPO process includes: 1. Price discovery through book-building or fixed pricing. 2. Public subscription and allotment. 3. Listing on the stock exchange. 4. Post-listing obligations, including quarterly financial disclosures and corporate governance compliance. --- 7. Post-IPO & Public Company Compliance The company is now publicly traded and must follow SEBI’s disclosure norms. Responsibilities include: Quarterly & annual financial reporting. Compliance with SEBI (LODR) Regulations. Corporate governance best practices. Shareholder meetings and investor relations We at Lawcify Consulting LLP, have helped many startups from Funding to IPO stages. Connect with us for more info.