This Interview has been published by Pragya Chandni and The SuperLawyer Team
Can you share with us your journey into the field of law, and what motivated you to pursue a career in corporate and investment transactions specifically?
I am a first-generation lawyer. Despite my brother’s suggestion to follow his path in journalism, I was determined to carve out my own journey. Interestingly, my brother himself is a first-generation journalist.
During my law studies, I diligently applied for internships at numerous prestigious law firms in the city. Unfortunately, responses were scarce, contrasting sharply with the experiences of friends who secured internships in known law firms and corporations. However, perseverance paid off, and I eventually secured internships in my final year.
Following my tenure at Agama Law Associates, I moved to LexStart Partners, a Mumbai-based law firm specializing in providing tailored support to startups. Joining as the firm’s first associate, I had the privilege of working directly under the guidance of Anisha Patnaik, the founder. With a clientele predominantly composed of startups, my role encompassed a broad spectrum of responsibilities, including helping them with incorporating their companies, managing day-to-day operations, structuring their employee incentivisation plans and facilitating fundraising. I credit my time at LexStart and the mentorship provided by Anisha for laying the cornerstone of my career in corporate and investment transactions.
Then, I joined Economic Laws Practice (ELP), where I worked on more complicated and high value deals. At ELP and then at Stratage Law Partners (Stratage), I learned a lot from my Partner, Shyam Pandya. He showed me how to handle intricate transactions, meet tight deadlines, and build good relationships with everyone involved in the deal, making it easier to close deals smoothly. Shyam not only honed my legal acumen but also taught me the significance of effective collaboration and communication in facilitating seamless deal closures, marking pivotal milestones in my professional growth as a lawyer.
Your experience spans across various prestigious law firms and companies. How have these different environments shaped your approach to legal practice, especially in the realm of venture capital and private equity?
Having had the privilege of working in top ranked law firms such as Economic Laws Practice and then moving to fast growing firms like Stratage, alongside experience in leading companies like Pepperfry, I’ve been exposed to diverse environments that have significantly influenced my approach to legal practice, particularly within the realms of venture capital (VC) and private equity (PE).
At ELP and Stratage, renowned for their expertise in corporate and commercial law, I honed my skills in structuring complex transactions, conducting due diligence, and navigating regulatory frameworks. This exposure instilled in me a meticulous approach to legal analysis and a deep understanding of the complexities involved in VC and PE deals.
Transitioning to Pepperfry, India’s top marketplace for furniture and home furnishings, provided me with invaluable insights into the operational side of businesses seeking VC and PE funding. Working closely with internal stakeholders, including the business, finance and strategy teams, I gained firsthand experience in identifying growth opportunities, mitigating risks, and aligning legal strategies with broader business objectives.
These varied experiences have equipped me with a holistic perspective on the VC and PE landscape, enabling me to offer strategic counsel. In essence, my journey through various prestigious law firms and companies has not only enhanced my technical expertise but also filled me with an understanding of the intricacies of venture capital and private equity, enabling me to deliver strategic, commercially astute legal counsel.
Could you highlight some of the most memorable or challenging transactions you’ve been involved in throughout your career, and what lessons did you learn from them?
One such deal I remember was representing the promoter of a large company. It was in mid-March, and everyone wanted to finish the deal before March 31. I worked till early morning hours at the client’s office with the partners I was working with. We would get drafts of agreements from the investor’s lawyer late at night, and we would quickly discuss and send back our changes within a few hours. It showed great teamwork, and we managed to close a high value deal in about two weeks. From this experience, I learned the importance of effective communication, quick decision-making, and teamwork in meeting tight deadlines and closing deals successfully in the fast-paced world of investment transactions.
Another notable deal I worked on was a 100% acquisition deal where we represented all the existing investors who were exiting. It was quite complex because the business was structured through multiple group companies. Moreover, the parties involved were located in different time zones across the globe. From this deal, I learned the importance of thorough understanding of complex business structures, effective coordination across international time zones, and the significance of clear communication in navigating intricate investment transactions.
As someone who has worked extensively with startups, what unique legal challenges do you often encounter in this space, and how do you address them?
As someone deeply immersed in the startup ecosystem, some of the unique legal challenges I come across are:
- Not obtaining IP registration.
I have also come across situations where the startup did not procure a trademark registration for their brand name and consequently the competitor applied for a similar trademark which was later granted registration. The startup lost its court battle to protect its brand name and was directed to pay damages to its competitor and also incur huge expenses in rebranding. I advise all founders to obtain registration of their brand name even if it is unique. This will provide you exclusivity over the brand name and also the right to object if someone tries to copy your brand name.
- Not having IP registration in the name of the startup.
IPs such as trademarks and domain names are often registered in the name of the founders or in some cases in the names of the founder’s relatives. Investors want all the assets including the IP to be owned by the company which means that they should be registered in the name of the company and not in the name of any individual. Prior to a fund raise the investor would want the IP to be transferred in the name of the company but transferring the IP could take time, especially if it is a complex IP which can delay the fund raise.
- Not having a co founders’ agreement in place.
First time founders do not realise the importance of a co-founders’ agreement between the startup’s founders. They feel that at the time of fund raising the investor will put in place a shareholders’ agreement then why unnecessarily invest time and money in a co-founders’ agreement. Until a startup has raised funds from an external investor, a co-founders’ agreement provides clarity and sets expectations among startup founders regarding ownership, responsibilities, and decision-making authority. It helps prevent disputes by outlining procedures for resolving conflicts and addressing key scenarios such as founder departures.
- Ignorance of labour laws.
Early stage startups often tend to ignore labour laws due to lack of knowledge which pose significant risks for startups, leading to legal liabilities, penalties, and reputational damage. For example, in India, failure to comply with provident fund and employee state insurance laws or employment termination laws can result in costly litigation and hefty fines. To overcome this challenge, startups should invest in educating themselves about relevant labour laws, seek guidance from legal experts or consultants specializing in employment law, and implement robust HR policies and procedures to ensure compliance. By prioritizing legal compliance and staying informed about labour regulations, startups can mitigate risks and create a positive work environment conducive to growth and success.
In your current role as General Counsel at Pepperfry Limited, what are some of the key legal considerations you prioritize to ensure the company’s growth and compliance in a rapidly evolving market?
As General Counsel at Pepperfry Limited, I prioritize several key legal considerations to ensure the company’s growth and compliance in a rapidly evolving market. Firstly, I focus on maintaining a robust regulatory compliance framework, staying abreast of changing laws and regulations relevant to our industry and geographic locations. Secondly, I prioritize intellectual property protection, safeguarding our brand, products, and innovations through registrations and objections. Thirdly, I emphasize contract management and negotiation, ensuring that our agreements with vendors, partners, and customers are fair, enforceable, and aligned with our business objectives. Lastly, I foster a culture of legal awareness through regular legal updates to key stakeholders. Whenever there is any amendment to an existing law or a new law is being introduced which is applicable to us, the legal team discusses the implications and the impact it would have on the business and steps to be taken to ensure compliance.
Given your expertise in structuring employee benefit plans, how do you see the role of such plans evolving in the context of modern workplaces, especially within the startup ecosystem?
Employee benefit plans have evolved significantly in modern workplaces, particularly within the startup ecosystem. In the past, they were primarily used as a way to attract top talent with the promise of potential future wealth. However, today, they play a more integral role in employee compensation packages, serving as a key tool for startups to incentivize and retain employees. These plans now offer more flexibility and transparency, allowing employees to understand their value and potential rewards better. Additionally, startups are increasingly using innovative equity-sharing structures to align employee interests with company growth and success, promoting a stronger sense of ownership and commitment among team members.
Could you share some insights into the process of representing venture capital firms and private equity investors, particularly in terms of negotiation strategies and mitigating risks?
Representing venture capital firms and private equity investors involves navigating intricate negotiation processes and mitigating associated risks which predominantly include:
- Understanding Objectives.
It is essential to thoroughly understand the objectives and priorities of both the venture capital firm/private equity investor and the target company. This understanding lays the foundation for crafting negotiation strategies that align with the interests of all concerned parties.
- Negotiation Strategies.
Negotiation strategies often involve striking a balance between maximizing returns for investors and ensuring the target company’s growth prospects are not compromised. This may involve negotiating terms such as valuation, governance rights, protective provisions, and exit mechanisms. Employing collaborative negotiation techniques while also advocating for your client’s interests can lead to mutually beneficial outcomes.
- Risk Mitigation.
Mitigating risks is paramount in venture capital and private equity transactions. Conducting thorough due diligence to identify and assess potential risks, including legal, financial, tax, technical and operational concerns, is crucial. Negotiating robust representations, warranties, and indemnification provisions can help allocate risks effectively between parties. Additionally, structuring the transaction in a manner that provides sufficient safeguards, such as milestone-based investments or earn-outs, can mitigate risks associated with uncertainty.
- Legal Documentation.
Crafting comprehensive legal documentation, including investment agreements, shareholder agreements, and governance documents, is vital for delineating rights, obligations, and responsibilities of all parties involved. Ensuring clarity and specificity in these documents can help prevent misunderstandings and disputes down the line.
- Relationship Management.
Building and maintaining positive relationships with all stakeholders throughout the negotiation process is key. Effective communication, transparency, and professionalism contribute to furthering trust and collaboration, which are essential for successful outcomes.
- Adaptability.
Flexibility and adaptability are essential qualities when representing venture capital firms and private equity investors. Flexibility in negotiation means being able to change plans if needed during discussions. It helps find solutions that work for everyone involved, even if things do not go as expected. By staying open to different ideas, flexibility can lead to better agreements that satisfy both sides and this will help you close the deal efficiently.
Lastly, what advice would you offer to law graduates aspiring to specialize in corporate law and investment transactions, based on your own experiences and observations in the field?
To law graduates aspiring to specialize in corporate law and investment transactions, I would offer the following advice based on my own experiences and observations in the field:
- Develop a Strong Foundation.
Invest time in building a solid foundation in corporate law fundamentals, including contract law, corporate governance and securities laws. A strong understanding of these core principles will serve as a springboard for success.
- Gain Practical Experience.
Seek opportunities to gain practical experience through internships, or entry-level positions at law firms or investment funds. Firsthand experience is invaluable for developing practical skills, understanding client needs, and navigating real-world legal challenges.
- Specialize and Stay Informed.
Consider specializing in specific areas within corporate law, such as venture capital, private equity, mergers and acquisitions. Stay abreast of industry trends, regulatory developments, and emerging best practices through continuous learning, attending seminars, and participating in professional associations.
- Develop Soft Skills.
Cultivate essential soft skills such as communication, negotiation, and problem-solving, which are crucial for success in corporate law and investment transactions. Effective communication with clients, colleagues, and stakeholders is essential for building trust and fostering productive relationships. Your communication skills should be so clear that at an early stage also your partner should be comfortable letting you speak with the clients directly.
- Network Strategically.
Build a strong professional network within the legal community, including mentors, peers, and industry professionals. Also, connect with the investment bankers and tax experts that work on the investment transactions. Networking not only opens doors to career advancement opportunities but also facilitates mentorship and collaboration on intricate transactions. Over time, cultivating these relationships can lead to a diverse clientele base and enhance professional development within the legal field.
- Embrace Challenges.
Embracing challenges presents valuable opportunities for personal and professional growth. It is important not to shy away from assignments or projects that push you beyond your comfort zone. Additionally, being adaptable and open to working with individuals across all levels and teams of the organization is crucial. By regarding failures and setbacks as opportunities to learn and grow, you can use them to propel yourself towards achieving your long-term career goals.
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