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Startup Equity
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Angel investing is neither a liquid asset class nor has fixed/ predictable returns (with a possibility of losing the entire invested capital). Angel investors typically look to get an exit in the later stages of fund-raising, and the timeline for the same depends on each start-up. Typically, the following exit options are available:

  • Exit: If a lucrative opportunity for selling/disposing off the securities becomes available in the next rounds of funding due to an incoming or existing investor willing to buy out the existing angel investors, the start-up will notify the AIF. Since the equity investment opportunities on Grip's platform are facilitated through an AIF, the Investment Manager of the AIF will make the decision to exit the investment at its sole discretion.
  • Resale Market: As of now, start-up investing platforms do not facilitate secondary share sale. Since the investment made by Grip's users is held by them in the form of units of the relevant scheme of the AIF, these units can be transferred to other angel investors prior to an exit by the AIF from the underlying start-up. Similar to most platforms, Grip also does not have a secondary market for the sale of the units. However, we can try facilitating an exit for the selling investor on a reasonable-effort basis after taking the consent of the AIF.
  • Private Sale: An investor may sell their fraction/holding (i.e. units of the AIF) to anyone they may know, such as friends or family. The AIF can also facilitate this sale through the secondary transfer of the units held by the selling investor to an incoming investor (identified by the selling investor).

The instruments which are typically used for fundraising in startup equity are: Equity Shares, Compulsorily Convertible Preference Shares, Optionally convertible preference shares, and Compulsory Convertible Debenture. However, please note that in all cases, users on Grip will be allotted AIF units considering that the users make investments through the AIF. Grip does not faciliate any direct sale of securities issued by any company to its users. We provide a discovery platform for AIF units.

Grip has partnered with Alternative Investment Funds (AIFs), to provide investors with these equity investment opportunities. Grip, does not play any role in the management of these start-ups or conducting the social and background checks of the start-up and team members. Grip will provide legal and financial diligence report to the users to undertake assessment, if available.

Angel investing is neither a liquid asset class nor has fixed/ predictable returns with a possibility of losing the entire invested capital.

Your investment is solely based on your own judgment, knowing the risks involved in this dynamic marketplace. We do not guarantee a return on investment because it is dependent on market conditions and start-up execution.

But as a rule of thumb, Angels all over the globe say that a 3x return over three years is respectable, but a 7x-10x return over three to seven years is a Grand Slam!

Every investor should be aware that an investment in any company or AIF units of schemes investing in any investee company (each, a “Startup”) involves a high degree of risk, regardless of whether such investment is made directly or through an AIF investment vehicle (“Fund”).

The following considerations, among others, should be carefully evaluated before investing in a Startup or a Fund:

  • Risk Inherent in Startup Investments: Startup investments carry a high level of risk. Startups face enormous financial and operational risks. While targeted returns in any investment situation should represent the perceived level of risk, such returns may never be realized and/or may not be sufficient to recompense an Investor or a Fund for risks taken. It is possible and likely that an investor's entire money will be lost. Furthermore, any return on investment is exceedingly unclear in terms of timing.
  • Risk of change in a Startup's plans, markets, and products: The value of an Investor's stake in a Startup may be more vulnerable to variables impacting Startups and the technology industry in general. Because of the changes and advancements in this industry, the startups may need to rethink their business models and make major adjustments to their long-term objectives and business plans. Failure of such Startups to make such changes would have a major negative impact on their business, as well as a material negative impact on the returns on an investor's investment in such a Startup, including the possibility of a full loss of investment.
  • Dynamic Economic Conditions: The success of any investment endeavor is influenced by general economic conditions to some extent. External credit markets, stock markets, and other economic systems on which a Startup or a Fund may rely to fulfill its objectives may be available, unavailable, or inoperable, which can have a severe negative influence on a Startup's or a Fund's operations and profitability
  • Low Liquidity and no active public market: A majority of an investor's holdings will be private and illiquid. As a result, there will be no public markets for the Investor's assets, whether directly or through a Fund, and no easily available liquidity mechanism for any of the investments at any one moment. Furthermore, a Fund investment is illiquid, not freely transferable, and has a high level of risk. There is no public market for membership interests in a Fund and no public market is expected to emerge. As a result, an Investor will be responsible for the economic risks associated with their investment for the duration of the Fund.
  • Absence of Investor Control: Investors in a startup will not have any say in the management, disposition, or other realization of any investment made by the relevant Fund, or in any other aspect of the startup's operations

The investors will own Class A and Class D units of the particular scheme offered by Grand Anicut Angel Fund and SiriusOne Capital Fund, respectively of the investee entity. Since the equity investment opportunities on Grip's platform are facilitated through an AIF, the rights to this investment are vested in the AIF's Investment Manager, who will make the decision on behalf of all the shareholders at its sole discretion.