Equity splits, vesting, IP assignment and departure terms — decided in one conversation and never documented. It's the single most common gap our due diligence finds, and the one every investor's diligence flags hardest.
Startup & Venture Capital Advisory
Lynx Legal Partners LLP is a Mumbai-based startup and venture capital law practice for founders, VC investors, angel networks, and growth-stage companies — from a founding team's first conversation to a successful IPO or acquisition exit.
A poorly negotiated term sheet, an improperly structured ESOP plan, a missing vesting schedule, or a FEMA gap in a foreign round can haunt a company through every subsequent raise, diligence process, and exit. Our advice is founder-friendly, investor-literate, and delivered at startup speed.
A fixed-fee founder & cap table health-check — reviewing your founders' agreement, vesting schedules, IP assignment, and DPIIT/ESOP compliance status, scoped and priced upfront. Clients typically move to ongoing fundraise support, ESOP administration, or a founder-friendly legal retainer through to exit.
Five things — and one that founders routinely miss. Equity split. A vesting schedule with a cliff, typically four years with a one-year cliff, applied to founders too and not only to employees. A present assignment of all founder-created IP to the company. Roles, reserved matters and decision rights. Good-leaver and bad-leaver terms with transfer restrictions. The miss: under V.B. Rangaraj v V.B. Gopalakrishnan (1992), share-transfer restrictions sitting only in a shareholders' agreement and not in the Articles of Association are not binding on the company. Mirror them in the AoA. Corporate practice.
By a written deed of assignment, executed before the term sheet — not during diligence. Under s.19, Copyright Act 1957 an assignment must be in writing and signed, and defaults bite if you are vague: five years where no duration is stated (s.19(5)), India only where no territory is stated (s.19(6)). Use present-tense language — "hereby assigns". Trade marks are assigned under the Trade Marks Act 1999 and recorded with the Registry; patents need writing plus registration with the Controller (ss.68–69, Patents Act 1970). Don't forget repositories, domains and design files. IP portfolio management.
Create the pool before the priced round closes — investors will require it pre-money, which dilutes founders rather than them. Typical sizing is 8–15% from seed through Series A. Mechanically it runs on s.62(1)(b), Companies Act 2013 and Rule 12 of the Share Capital and Debentures Rules; private companies may pass an ordinary resolution. Tax bites twice: perquisite tax at exercise on fair value less exercise price (s.17(2)(vi)), then capital gains at sale. DPIIT-recognised startups holding s.80-IAC certification can defer the exercise-stage TDS under s.192(1C).
The same eight items, in almost every data room. Founders' agreement unsigned or absent. IP never assigned from founders, employees or contractors. ESOP grants issued but never approved by shareholders. A cap table in a spreadsheet that does not reconcile with MCA filings. FC-GPR missed on foreign money. Share certificates unissued or stamp duty unpaid. Statutory registers and board minutes months behind. Nothing started on DPDP. None of these usually kills a round — they cost weeks, then reappear as indemnities, escrow or a price chip. DPDP practice.
A time-boxed, fixed-fee engagement that clears everything the last diligence flagged, before the next one finds it again. Scope is agreed upfront and typically covers: closing the IP assignment chain across founders, employees and contractors; aligning the founders' agreement with the Articles; adopting the ESOP scheme and papering outstanding grants; reconciling the cap table against MCA records; bringing statutory registers and board minutes current; confirming FEMA filings; reissuing employment templates with IP and confidentiality clauses; and a DPDP baseline. One fee, one deliverable list, one agreed timeline — designed to run in the quiet weeks straight after a round closes, when nobody is under deal pressure.
Have a question that isn't here? Send it to us on WhatsApp — we answer scoping questions without a meeting.
Send us your founders' agreement or latest term sheet — we'll flag what's exposed, fixed-fee, same week.
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