Pre-Investment Restructuring & Cap Table Clean-Up.
A term sheet does not wait for the structure to be ready — the cap table is made institutionally legible before capital arrives.
A foreign fund has signalled interest, diligence is weeks out, and the company’s ownership record still carries how it was built — convertible notes on inconsistent terms, advisory equity that was promised but never issued, an option pool that exists in conversation rather than in the register, and prior allotments to non-residents that were never reported under FEMA. None of it constrained a self-funded company; all of it surfaces the moment an investor’s counsel opens the file.
Pre-investment restructuring is the discipline of correcting that Structural Design while there is still time to do it on the company’s terms, rather than under the pressure of a live round. The firm treats it as the work that decides whether the round is a negotiation or a remediation.
How We Ready a Company for Capital.
Investor readiness is a structural property of the company, not a document pack assembled for diligence. A company is ready when its cap table reconciles to its statutory registers, its prior foreign investment is FEMA-compliant, and its constitution can absorb the instruments a round introduces without contradicting the rights already granted.
The firm works backward from the diligence the round will run, and corrects the structure before it is examined. The governing distinction is between what must be settled before a term sheet and what can be negotiated within it — because a defect an investor discovers becomes a price adjustment or a condition precedent, while the same defect resolved in advance simply disappears.
- Register integrity Whether the cap table reconciles to the register of members and the allotment filings, so an investor can rely on the company’s own record of who owns it.
- FEMA compliance Whether prior investment by non-residents was reported within the prescribed window and priced to the FEMA pricing guidelines, since unreported inflows compound into a diligence exposure.
- Instrument coherence Whether existing convertibles, SAFEs, and informal grants convert predictably, or collide with the instrument the incoming investor will use.
- Constitutional fit Whether the Articles and any existing shareholders’ agreement can carry the new rights stack without contradicting rights already in place.
Correcting the Structure Before It Is Examined.
The work divides into two orders of correction — reconciling what is already on the books, and repositioning what the round itself will not tolerate. Both are structural, and both are far cheaper before a term sheet than during diligence.
Reconciliation and Structural Correction
The first order is reconciliation. The cap table founders carry in a spreadsheet rarely matches the statutory register of members, and the gap is usually a trail of allotments where the PAS-3 filing, the valuation, or the board and shareholder approval is incomplete. Closing that gap is not housekeeping — it is what allows an investor to rely on the company’s record of its own ownership, which is the precondition for the entire transaction.
For a foreign-backed company the sharper exposure is FEMA. Equity issued to a non-resident must be reported within the prescribed window and priced to the pricing guidelines; capital that was parked as share-application money too long, taken as a loan, or never reported becomes a compounding contravention that surfaces at the worst possible moment. Identifying and regularising it in advance removes a condition the investor would otherwise impose, and a contravention that would otherwise route into compounding.
The second order is repositioning. An option pool promised but never created, founder equity with no vesting, or a note stack on inconsistent terms all distort the post-money the investor is pricing against. Setting the pool, formalising vesting, and rationalising the instruments resets the structure to what the round assumes — so the negotiation turns on value, not on cleaning up the past. The instruments and rights the round introduces are then designed within the company’s wider capital structuring work.
What a Clean Structure Sets in Motion.
Readiness settled early pays out across the round and everything that follows it.
Diligence posture
A reconciled cap table and a clean FEMA position turn diligence into confirmation rather than discovery, protecting both timeline and valuation.
Negotiating position
Defects resolved in advance cannot be repriced into the term sheet or converted into conditions precedent the company must scramble to satisfy.
Capital continuity
A coherent instrument stack means this round converts predictably into the next, instead of carrying disorder forward into a later clean-up.