IPO Preparation Steps

ESOPs don’t always work, but when they do its magical 5000 Swiggy employees made around 9000 crores in the IPO Some would have made 100 cr plus Many many more would have made 10 cr plus Life changing money for most people and will enable risk taking and another 100 plus startups from this set If you are evaluating offers from startups with significant ESOP component, this is how you should evaluate it For an employee to make meaningful money through ESOPs, 2 things must happen: - Growth in company value - Employee friendly ESOP policies that ensures employees make money when company grows a) Growth in Company Value This is where employees need to think like investors Just like investors are particularly wary of what valuation they are coming in, entry valuations should matter for employees too ESOPs are allotted basis the current valuation The likelihood of a 10x growth in your ESOPs if you are joining a startup valued at 100 million $ is much higher compared to joining a startup already valued at 5 billion $ A 75 lakh ESOP allotment in a 1000 cr valued org with chances of a 10x growth could be a better offer than 2 cr ESOP allotment at a 20000 cr valued org with lower chances of future growth The second thing to judge is the business model and the likelihood of the business to grow( very important for Seed/Series A/B startups) b) ESOP Policies The startup ecosystem is full of stories where employees didn’t make money despite the company growing and having multiple liquidity events. Swiggy, Zomato are examples of great ESOP policy. Many companies have extremely shitty ones Here are the things that should matter most while evaluating policies: 1. Vesting Schedule: The standard is 25% vesting after every year. Any schedule which has higher vesting towards the later years is a red flag Vesting should never be performance linked If performance is bad, it is management’s responsibility to fire 2. Vesting on Leaving/Startups Exit: If you exit, you should retain all options that has vested If a startup gets acquired before all your options vest, there should be accelerated vesting 3. ESOP Communication: There should always be written communication( preferably through ESOP portal) Verbal communication for ESOPs is a huge red flag 4. Strike Price: Strike Price should be as low as possible( Re 1 ideally). This maximizes the value creation for the employee 5. Holding/Exercise Period: Converting options to shares is a major tax liability exercise. With limited exercise period, it becomes impossible for employees to exercise as it means paying up to 40% real taxes on notional capital gains in an asset class that is not liquid Ideally, holding period should be infinite for vested options, even after exit This enables employees to wait for liquidity events without incurring upfront taxation to be paid out of own pocket

How We Built Our Family Office and What We Learnt Along the Way After I joined the family business in 2017, we established our family office. What began as simple allocations soon evolved into a comprehensive investment journey spanning PE, VC, public markets, and alternatives. We’re evolving. We’re investing. We’re learning. Here are a few key takeaways that have shaped our perspective on capital, conviction, and compounding. (Part 1) 1. Always Ask: Why Is This Deal Coming to You? If a deal lands on your table and it’s not with larger funds or more established family offices, pause and ask: why? There’s often an angle, sometimes it’s a genuine fit, but often, there’s a reason it’s not elsewhere. 2. Relationships Matter More Than Firms Advisors and brokers are everywhere, but only a handful genuinely have your long-term interest at heart. Build deep, trusted relationships with a select few. The right advisor can transform your deal flow and outcomes. 3. Institutionalise Your Process Having a clear Investment Policy Statement (IPS) is a game-changer, especially as families grow and more voices join the decision-making table. We operated without one for too long, and implementing structure has brought much-needed discipline. 4. Avoid FOMO and Time-Pressured Deals If you’re being pressured to commit quickly, walk away. There are always more opportunities. As a family office, you don’t need to chase every “hot” deal, focus on what you understand deeply and be patient. 5. Be Wary of Late-Stage/Pre-IPO Rounds We’ve largely avoided pre-IPO deals, valuations are inflated, and the upside is limited. The J-curve returns are usually already captured by early investors. Tempting brands at this stage often offer familiarity, not value. Real long-term gains often lie after the listing, not before. 6. First-Time Managers We’re cautious with first-time funds, which often face operational teething issues. Unless we have deep conviction in the team, we prefer managers with a solid track record and robust systems already in place. Fees may vary slightly, but always opt for A-grade managers. 7. Cost of Returns Matter Returns only matter after fees and taxes. We actively monitor our “cost of return” across asset classes, including the amount we pay in management fees, carry, transaction costs, and taxes, relative to what we earn. Post-fee, post-tax returns are the true benchmark. This discipline keeps capital efficient and ensures we’re tracking it across asset classes and portfolio level. 8. Say No, But Keep Showing Up Discipline is everything. We track how many deals we reject; if the “no” ratio isn’t high, we’re probably not being selective enough. Saying no is a superpower in this business. But that shouldn’t stop you from meeting a lot of people. Show up. Listen. Learn. 📣 P.S. We’re hiring for a senior position at our family office. If you’re someone who wants to join and scale it with us, email me at: jai@malpani.com

Hidden Lock-in clauses in a Contract Majority of the contracts won’t say “lock-in period.” But that doesn’t mean you would not be stuck. Here are some sneaky ways contracts lock you in, without ever using those words: 1. No termination for convenience: You can only exit if the other side messes up. If they don’t? You’re stuck till the end. 2. Auto-renewals with tight notice windows: The contract says it's valid for 1 year, but quietly auto-renews unless you give 90 days’ written notice before it ends. Miss the notice window = another year added. 3. Hefty early exit fees: You’re allowed to leave the contract in between, but only if you pay 6 months’ worth of charges. That’s a lock-in wearing a price tag. 4. Minimum commitments: The contract says you must buy 100 units every month, even if you only need 40. You’re paying for more than you actually use, with no refund or flexibility. 5. Upfront discounts that claw back: You got a benefit upfront, but leave early, and you have to return it. Basically: A "gift" that turns into a bill if you leave. 6. Notice + cure periods before termination: Even when you can exit, you have to wait. 30 days’ notice + 30 days for them to “fix” things = 2-month cooling-off before you’re free. Bottom line: Don’t search for the word ‘termination' only. Ask: Can I walk away if I need to? If not, there’s a lock-in hiding in formal language that needs to be taken care of. #contractreview #inhousecounsel

𝗖𝗮𝗻 𝘆𝗼𝘂𝗿 𝗲𝗺𝗽𝗹𝗼𝘆𝗲𝗿 𝗹𝗲𝗴𝗮𝗹𝗹𝘆 𝗰𝗵𝗮𝗶𝗻 𝘆𝗼𝘂 𝘁𝗼 𝘆𝗼𝘂𝗿 𝗱𝗲𝘀𝗸 𝗱𝘂𝗿𝗶𝗻𝗴 𝘁𝗵𝗲 𝗹𝗼𝗰𝗸-𝗶𝗻 𝗽𝗲𝗿𝗶𝗼𝗱? This question was dealt by the Delhi HC in a case involving 𝙇𝙞𝙡𝙮 𝙋𝙖𝙘𝙠𝙚𝙧𝙨 𝙋𝙫𝙩. 𝙇𝙩𝙙. and one of its employees, 𝙑𝙖𝙞𝙨𝙝𝙣𝙖𝙫𝙞 𝙑𝙞𝙟𝙖𝙮 𝙐𝙢𝙖𝙠. ➤ 𝗪𝗵𝗮𝘁 𝗛𝗮𝗽𝗽𝗲𝗻𝗲𝗱? ↳ Lily Packers, took offence when Vaishnavi decided to leave her position as a fashion designer before completing the agreed three-year lock-in period. ↳ The company, fearing breaches of confidentiality and other contractual obligations, sought arbitration to resolve the dispute. ↳ The issue of whether a lock-in period in an employment agreement is arbitrable or not was raised before the Delhi HC. ↳ The Delhi HC while affirming the arbitrability of such a clause discussed the issue of validity and enforceability of lock-in periods. ➤ 𝗧𝗵𝗲 𝗩𝗲𝗿𝗱𝗶𝗰𝘁 ↳ The court ruled that the lock-in clauses are valid contractual agreements and they do not violate fundamental rights. ↳ Such clauses are in nature of  ‘lawful and reasonable covenants’. ↳ The court also noted that these provisions are essential for employer stability, particularly when significant resources are spent on training employees. ↳ Furthermore, the court held that such provisions are like the backbone of a healthy work environment—necessary for the stability and growth of the employer while offering clarity to employees. ➤ 𝗟𝗲𝗴𝗮𝗹 𝗣𝗲𝗿𝘀𝗽𝗲𝗰𝘁𝗶𝘃𝗲 ↳ Questions often arise about whether lock-in periods infringe on the employees' freedom to work as protected by 𝘼𝙧𝙩𝙞𝙘𝙡𝙚 𝟭𝟵 𝙤𝙛 𝙩𝙝𝙚 𝙄𝙣𝙙𝙞𝙖𝙣 𝘾𝙤𝙣𝙨𝙩𝙞𝙩𝙪𝙩𝙞𝙤𝙣 and 𝙎𝙚𝙘𝙩𝙞𝙤𝙣 𝟮𝟳 𝙤𝙛 𝙩𝙝𝙚 𝙄𝙣𝙙𝙞𝙖𝙣 𝘾𝙤𝙣𝙩𝙧𝙖𝙘𝙩 𝘼𝙘𝙩, 𝟭𝟴𝟳𝟮. ↳ Section 27 generally renders agreements in restraint of trade void, but the court clarified that such restrictions during employment are not contrary to law. ↳ The court leaned on previous cases like 𝘉𝘳𝘢𝘩𝘮𝘢𝘱𝘶𝘵𝘳𝘢 𝘛𝘦𝘢 𝘊𝘰. 𝘓𝘵𝘥. v. 𝘚𝘤𝘢𝘳𝘵𝘩 (1885) and 𝘕𝘪𝘳𝘢𝘯𝘫𝘢𝘯 𝘚𝘩𝘢𝘯𝘬𝘢𝘳 𝘎𝘰𝘭𝘪𝘬𝘢𝘳𝘪 v. 𝘊𝘦𝘯𝘵𝘶𝘳𝘺 𝘚𝘱𝘪𝘯𝘯𝘪𝘯𝘨 & 𝘔𝘢𝘯𝘶𝘧𝘢𝘤𝘵𝘶𝘳𝘪𝘯𝘨 𝘊𝘰. (1967) to establish that in-employment restrictions are generally lawful, while post-employment ones can be problematic. ➤ 𝗣𝗿𝗮𝗰𝘁𝗶𝗰𝗮𝗹 𝗜𝗺𝗽𝗹𝗶𝗰𝗮𝘁𝗶𝗼𝗻𝘀 In this case, the lock-in period meant that Vaishnavi committed to staying with Lily Packers for a specific duration, ensuring that the company’s investment in her training would not be wasted. The court pointed out that such terms are typically negotiated and agreed upon voluntarily, providing clarity and protection for both parties. 𝗜𝗳 𝘆𝗼𝘂’𝗿𝗲 𝗮𝗯𝗼𝘂𝘁 𝘁𝗼 𝘀𝗶𝗴𝗻 𝗮 𝗰𝗼𝗻𝘁𝗿𝗮𝗰𝘁 𝘄𝗶𝘁𝗵 𝘀𝘂𝗰𝗵 𝗮 𝗰𝗹𝗮𝘂𝘀𝗲, 𝘁𝗮𝗸𝗲 𝗮 𝗺𝗼𝗺𝗲𝗻𝘁 𝘁𝗼 𝗿𝗲𝗮𝗱 𝗶𝘁 𝗰𝗹𝗼𝘀𝗲𝗹𝘆 𝗮𝗻𝗱 𝘂𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱 𝘄𝗵𝗮𝘁 𝗶𝘁 𝗺𝗲𝗮𝗻𝘀 𝗳𝗼𝗿 𝘆𝗼𝘂.

Simple Prompts for Indian Listed Markets using Gemini 2.5 – Part 2 – 1 - Fundamental and Technical Analysis - - Provide a combined fundamental and technical analysis of Marico - Fundamental: Summarize the company's latest quarterly results, including key financial metrics like revenue, net income, and EPS. Discuss any significant changes in their business strategy, management commentary on future outlook, and potential risks. - Technical: Analyze the stock's performance over past 12 months. Identify key support and resistance levels, and discuss any notable chart patterns or trends. Conclusion: Based on both the fundamental and technical analysis, provide a balanced view on the stock's short-term and long-term potential. 2 - Sector-Specific Comparison - - Compare the top three companies in the FMCG sector in India. - Metrics: Analyze and compare their performance based on key financial ratios such as P/E ratio, Return on Equity (ROE), and Debt-to-Equity ratio. - Industry Trends: Discuss how recent industry trends, regulatory changes, or technological advancements are impacting each company. - Competitive Moat: Evaluate the competitive advantages or "moats" of each company and assess their ability to maintain market leadership. 3 - IPO and New Listing Analysis - - Analyze the recent Initial Public Offering (IPO) of Belrise Industries - Details: Provide a summary of the IPO, including the offer price, the number of shares issued, and the purpose of the funds raised. - Valuation: Compare the IPO valuation with that of its publicly traded peers. - Outlook: Discuss the company's growth prospects and the key risks highlighted in its prospectus. Conclusion - - End with five firm takeaways. - Assume a role: “You are a seasoned equity analyst and have evaluated thousands of public companies globally.” Formatting - - Easy to read language - Use bullet points Share your prompts and let's learn together!   Please note - AI is only good for data retrieval and a bit of data crunching. After it gives you a result, you need to delve deeper to draw conclusions. Stock names taken are not recommendations! All the best!

How 2 digital health rainmakers ended the IPO drought Hinge Health and Omada Health, the first digital health companies to go public this year, shared what it really takes to get there at HLTH USA 2025 💡 IPO readiness: Both Daniel Perez (Hinge) and Sean Duffy (Omada) agreed the key question isn’t when the market is ready, but when your business is. Predictable revenue, operational maturity, and disciplined forecasting matter more than timing. Hinge ran “public” internally for two years, requiring four straight beat-and-raise quarters before actually filing. Omada said most founders focus 80% on market timing and only 20% on business readiness, it should be the reverse 🏦 Working with bankers: They warned not to be seduced by inflated ‘bake-off’ valuations. Choose advisors who understand your business and will be honest about the high bar of expectations post-drought and the need for investor education 📈 What investors value: Public investors prize durable revenue growth and free cash flow above all. Growth is valued roughly twice as much as profitability, and positive cash flow changes the conversation from “are you sustainable?” to “how big can you get?” Both companies built track records over multiple quarters before listing 🧠 Building trust: It took 18–24 months of investor engagement to build confidence. Pension funds and institutional investors want a transparent, tech-driven story, not just healthcare services. Both positioned themselves as technology-led care platforms with scalability and 80%+ gross margins 🤖 AI transformation: Omada called 2024 “the year of GLPs and GPTs.” Hinge predicted that all non-touch aspects of care , from symptom analysis to care planning, will be automated by AI. The company has retrofitted AI across finance, HR, and ops, achieving 100% AI tool adoption among engineers. At HLTH, it unveiled AI movement analysis and a 24/7 assistant called Robin 🧭 Life as a public company: Short-term stock moves don’t matter. Both focus on long-term metrics - retention, engagement, NPS, outcomes. Both believe digital health firms with 70–80% margins and tech-led delivery deserve valuations closer to SaaS. “The next wave of IPOs,” Duffy said, “will be a different beast, tech that delivers care itself, not just software wrapped around it.” 💬Final reflections: Preparation is everything. Simulate public operations early, invest in accounting and investor relations, and build your forecasting muscle. As Perez put it: “The IPO day is like a company’s wedding, celebrate it with your team and families” 👀 Ones to watch as 2026 IPO candidates: Sword Health, Transcarent, Quantum Health, Maven Clinic, Virta Health and Zelis 👇Which digital health company do you think will be next to IPO? #htlhusa #hlth #digitalhealth

Stock options are more like handcuffs than an incentive. Because you don’t own equity with a “stock option”, you just under certain conditions have the option to buy the stock at a predetermined price. But if you want to leave the company to pursue a new passion or opportunity, you can’t. You’re handcuffed. Because if you leave, you need to actually buy the vested stock options to convert them to equity. Pay up or you forfeit the options. But you probably won’t be able to afford buying it. And you probably won’t want to and/or can’t afford to pay the taxes to buy it. Especially when the investment won’t produce cashflow. And the timeline to exit is totally unknown. And your potential return is totally unknown. So really, you’re just handcuffed to being an employee until a liquidity event. Which may not even make you any real money. Because your options sit low (or the lowest - common shares) in the capital stack. And even if company exits, you’ll be stuck paying ordinary income tax instead of capital gains which will cost you an extra ~20% of your net gain due to unfavorable tax treatment. ___ Real equity is how you get wealthy, not stock options. Real equity (usually) provides cash flow and (usually) provides tax benefits and (always) counts toward your net worth. Stock options do none of these. Let’s break down the differences - people need to know this stuff!! STOCK OPTIONS -You are granted options. You don’t need to buy the equity upfront. This *seems* like a good thing to inexperienced people, but it’s the worst because it classifies you as ordinary income (worker), not capital gains (investor). -Stock options don’t count toward your net worth. You don’t own them.  -Stock options have the least favorable tax treatment - ordinary income. Costs you an extra 20%  -Stock options don’t entitle you to dividends or cashflow -If you cease employment, you likely forfeit your options since you’d need to put up the 6-figure or 7-figures in cash to buy the equity (which is objectively often a terrible investment). EQUITY -You are an investor. You purchase equity with cash, note, or another form of payment -Equity counts toward your net worth at fair market value -Equity (usually, if held for more than 1 year) has favorable tax treatment - capital gains -Equity (usually) provides cash flow, at least for most companies outside of B2B tech who don’t burn excessively -Your *employment* is not tied to your *ownership*. You can leave the company whenever you want. Retain the equity. Be entitled to the distributions. And be able to sell the equity at FMV back to the company or another buyer ___ Want to get wealthy? Be an investor. In companies that produce cash flow to investors. Then be an employee there, too. And create net new enterprise value that builds your net worth. #b2b #equity #stockoptions #personalfinance *NOT FINANCIAL ADVICE. There are lots of situations with equity - do your own research & consult a Legal/Financial advisor

8 ways to prepare for your investor meeting (and not blow it) The first investor meeting isn’t a formality. It's often the only chance you get. No one expects perfection. But investors and their advisors (I’m both) do expect preparation. If you’re not ready, you’ve wasted your best chance. Here’s what I look for when someone walks into the room: 1. Be fluent in your numbers If I ask about margins, burn rate or customer acquisition cost, you should answer calmly and confidently, without deferring to your co-founder or getting your head stuck in your notes. 2. Explain your product like you're talking to a smart relative at a wedding Not every investor will know your space. Can you explain what you do in one line, without jargon? If not, you may understand your product but not your business. 3. Know your market better than I do If I’m investing in your sector, I will have done my homework. You should still know more. The best founders sound like experts, not enthusiasts. 4. Bring one sharp proof point It could be a customer quote, a repeat order, or a surprisingly low churn rate. Just one killer stat that proves this isn’t all theoretical. 5. Anticipate the obvious questions If you’re surprised by the question “Why now?” or “Who else is doing this?”, you’ve come unprepared. You should have thought through the first 20 minutes of the conversation as carefully as your deck. 6. Don't perform, converse A pitch is not a one-actor play. Engage. Ask for reactions. The founders I remember are the ones who listen as well as talk. 7. Be precise about the ask Not “somewhere between £500k and £1 million depending on how things go”. Tell me how much you need, what you’ll spend it on, and what success looks like after 12 months. 8. Leave me with a reason to care Maybe it’s your grit, your insight, your unusual background. Whatever it is, I need to remember something about you, not just the deck. Still polishing your pitch? Keep this list close. And share it with a founder who needs a nudge before their next big meeting. PS Tomorrow’s post: the eight questions I ask myself after you leave the room. PPS Every morning this week I'm posting about pitching! Please follow me and if you think this is useful for others please tag them in the comments.

When a fast-growing startup like Zepto pauses its IPO plans, most people react with surprise. Most people get excited when a company plans to launch its initial public offering (IPO). It’s seen as a big milestone, a sign that the company has made it. But from an entrepreneurial lens, this decision tells a very different story. One rooted in maturity, clarity, and long-term thinking. Here’s what is happening: • Zepto has been burning significant capital, reportedly around 30 to 35 million dollars a month during peak periods. • Its salary expenses remain disproportionately high despite a leaner workforce compared to competitors like Swiggy and Eternal. • Public market investors today are looking for profitable growth. With rising costs and operational challenges, an IPO in current conditions would have risked valuation pressure and long-term confidence. • Instead of forcing a listing, Zepto is opting to raise 700 million dollars through a private round from existing global investors. This will allow the company to stay aggressive without going public prematurely. • From regulatory hurdles to store closures, the company is clearly in a phase of recalibration. As founders and business leaders, there are important takeaways here: 💡 IPO is not a trophy. It is a transformation. It is not about visibility but about viability. A business must be mature in numbers, governance, and positioning before stepping into public markets. 💡 Valuation should not be the end goal. Chasing high valuations without strong fundamentals can limit your flexibility later. Market respect comes not from numbers but from consistency and delivery. 💡 Choosing to wait is not a weakness. It is wisdom. It takes discipline to step back, restructure, and build better. Delaying an IPO is sometimes a sign of long-term thinking and respect for shareholder trust. 💡 Fundraising is not just about cash. It is about control. Securing capital from strategic partners keeps momentum going while protecting valuation and optionality. It is not just about who gives money, but who aligns with the vision. 💡 Strong unit economics always win. Operational efficiency is the real strength behind sustainable businesses. High burn and fragile cost structures might get headlines, but not long-term trust. For startup founders, the lesson is simple: Build patiently. Scale responsibly. Go public only when the foundation is truly ready. Success is not about speed. It is about staying power. 📍Build something worth lasting. #businesslearning #ipo #business #entrepreneurship

The decision to go public is one of the most critical crossroads for any company—and it’s not as straightforward as it used to be. Experts like Bill Gurley often champion the benefits of IPOs: cheaper capital, increased accountability, and the discipline that comes with operating under public scrutiny. And he’s not wrong—when a company scales, that accountability can push it toward being a healthier, more sustainable business. But the landscape has shifted. In 2023, there were 154 IPOs on the US stock market, compared to 181 in 2022. Both were significantly lower than the record-breaking 1,035 IPOs in 2021. Many companies that seemed unstoppable a few years ago now fall short of the benchmarks expected by public markets. Investors are hesitant to bet on high-risk startups when they can back established players like NVIDIA or Amazon, still posting double-digit growth. And then there’s the founder mindset. The old playbook said IPOs were the ultimate flex. Now, autonomy is the goal. Founders are asking, “Why hand over control when private markets can give me the cash I need without the headaches?” Liquidity options in private markets have leveled up, and many companies are staying private longer, dodging the scrutiny and rollercoaster ride of going public. That said, it’s not all smooth sailing. Some companies get stuck in messy deals to avoid down rounds, which makes going public later even more complicated. Sure, players like SpaceX and Stripe are thriving, but plenty of others are stuck in no man’s land—neither crushing it privately nor ready to IPO. The reality? There’s no universal playbook. For some, the public markets bring the discipline and access they need to hit the next level. For others, staying private keeps their autonomy intact and simplifies their path forward. The real question isn’t just “When should we go public?”—it’s “Why does it make sense for us?” And that depends entirely on your company.