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Naaree Interviews Aakanksha Bhargava, CEO And President of PM Relocations | Business Tips

Naaree Interviews Aakanksha Bhargava, CEO And President of PM Relocations

Aakanksha Bhargava was born in Kolkata, India into a business family. When she was just 7 years old, her family relocated to Delhi where she graduated from the illustrious Hindu College.

At the Hindu college, she held 3 prestigious positions – President of Placement society, President of Choreography society and the Cultural Head for the College fest Mecca.

Moving ahead to gain deeper knowledge on managing a business, Aakanksha pursued and successfully completed her MBA from the world-renowned SP Jain School of Management (Singapore and Dubai). From here began her impressive journey to become one of India’s most successful women CEOs.

Aakanksha joined PM Relocations Pvt. Ltd. (PMR) when she was 21 years old. She always believed in making her own place and commanding respect because of her own achievements. She was the boss’s daughter hence the urge to prove herself was strong.

She began quickly changing things around and working towards scalability. She went on to handle PMR’s corporate sales, marketing and operations, among other departments. She travelled and lived in different parts of the country to understand the culture and pulse of the city establishing a good team and work process.

PMR is a Small-Medium Enterprise, a one stop solution for mobility needs, with respect to anybody relocating within India or overseas. It offers a complete solution for end to end relocation is available on a systematic online platform using technology.

Naaree interviewed Aakanksha Bhargava to understand her entrepreneurial aspirations, successes and challenges.

What inspired to become an entrepreneur? Did you always love it or was it something you got into?

Inspiration comes from the ability to be as creative as you want and as I grew up seeing my father working in this industry, I always knew what I wanted to become.

I wanted to make my career on my own, that’s why an entrepreneur. I have always believed that one should have confidence in themselves and show people something they potentially have never seen before.

If you are working for someone else, you help them with their vision. If you work towards your own defined vision and belief, you make your employees & colleagues breathe your vision and together work hard to make it a successful reality.

Right from childhood, I was always fascinated by my father’s professional commitment. He used to take me on the surveys scheduled on weekends. Hence, I was always curious to know how things are going to be handled and how passionately my father made sure that our customers are happy and stress-free while they moved with us.

I guess, that was the beginning of my interest in this industry. When I joined PMR in 2007 (then PM PACKERS), I realized that this was the place where my heart lies. I have always loved my place of working, I feel lucky to be a part of an industry that touches so many lives everyday.

I am grateful for the position I am at today which enables me to directly contribute to the lives of almost 550 employees and over 2 lakh customers who have moved with us till date.

When do you know that it is no longer just an idea in your mind, and that you can really turn it into a lucrative business?

Right from my childhood I knew I wanted to join my father in business. After completing my schooling from Tagore International School (Vasant Vihar), The Hindu College embraced me into their family and gave me the opportunity to complete my B.Com (H) with them.

Soon, I saw myself graduating and joining SP Jain School of Management, Singapore and Dubai to complete my management studies, ready to face the challenging world of service industry.

I worked as an International Sales Manager for a couple in years in PM Relocations and then worked in Corporate Sales and marketing. By the time I was getting involved in different sections of the company, I realized there is a broader way out to things.

When you work within a space your work might get restricted but when you work in different areas, you get too many ideas. I realized that this business has more potential than one can think and that was the day of success for the company.

The space we are in needs an in-depth introduction to anyone we meet hence I feel the need to tell people that moving can be made simpler with the right solutions and PMR can disrupt the space.

I think for me, Intent is important.

When I started, there were hardly any women in this industry. It was a male-dominated environment. I had to face a lot of criticism too.  The only thing I believed in was the Intent to do a good job and give my best to the right cause.

It is just about the strength of one’s mind and having faith in the intent of your heart that makes you achieve higher in life I can bet when you really do decide for something your courage will kick-ass you fear!! Take the plunge and you will see the miracles of life.

What lessons can you share from your startup experience?

I always believed in doing things on my own. I knew I wanted to do something different than others and that’s what made me work in this industry. This was unconventional, unexplored and unknown hence the zeal.

A lot of people don’t take you seriously in the beginning. since I was very young by the time I joined the company, people didn’t took me that seriously, and this thing never demoralized me but gave me motivation to show what I can do and how well.  Believe your vision and lead by example at each step.

Dealing with employees, partners and clients was difficult initially. One of the biggest challenges was to source people since we were stagnant for all those years, not many from the industry wanted to join us and fresh blood didn’t know about this industry.

Over this period, I had to lead by example at all levels right from selling to building the brand, to keep upgrading the processes and systems with increasing work and manpower, setting up a professional culture and most importantly all of this had to be done in budget since we have not been funded by anyone.

The business demands a lot of working capital whereas we work on credit; hence balancing the same was a challenge. It was difficult to work in the industry but as long as you have the courage and are ready to take up the challenges, you can get it all done!

What are some challenges that you faced initially when you started out? Do you have some examples to share and advice to women entrepreneurs on overcoming them?

Working in the male dominant, packing and moving industry was really a tough job. It was actually very difficult to deal with the employees, clients and partners in the initial years.

However as the time passed, I learnt how to handle tricky situations and deal with everyone around. I strongly believe that working in this industry needs a lot of determination, potential and most importantly patience. Have strength and you can conquer it all!

It was not really easy starting my career in the relocation industry, particularly when it comes to an industry that has dominance towards men. There were times when it was considered to be a ‘Man’s Job’ but the time changes and things got changed too.

The advice I have for ladies would be follow your heart, be true to your work, don’t let criticism weaken you and the rest will make you successful in everything you do. As long as you have faith and determination, Entrepreneurship is happy to welcome you all!

What are all the things that a woman entrepreneur needs to keep in mind? Apart from your great idea, what do you need to be armed with?

The most important thing for a woman entrepreneur is to have critics in her life. I strongly feel that “If you have no critics, you’ll likely have no success”.

One needs to have a high level of commitment and patience to breathe your vision into your employees. Also, I am thankful that I am blessed to have an extremely supportive family. Most women don’t have supportive families because of which they fail to realize their dreams.

Indian women also tend to downplay their own potential. I feel women should do what is best for them. Even if that means, entering a male-dominated industry like ours.

Times have changed, although the challenges are still there, but you need to keep the spirit alive. It is important to learn from past mistakes and move on.

Do women entrepreneurs find it tougher to get funding for businesses? If yes, why do you think that is?

I agree it becomes difficult sometimes.  Many people in the country think that women cannot work and handle the business and that’s the only reason and more importantly once you get married, how would the work life balance happen. Unfortunately, these questions are never put across to men.

Is it beneficial to have a mentor when you’re starting out on your own? What does a mentor bring to the table?

It is very important to have strong mentors in life. They give you a strong inspiration to set goals and then direction and understanding to achieve the goals. I have grown up seeing my father (Mr. Rajeev Bhargava, MD) working and he has been my greatest mentor till date.

He keeps encouraging me to keep raising the bar. His faith and belief in my vision has kept me going. And most importantly, the belief of your team (PMR Family) in you is the biggest strength.

Apart from him, from our industry, I also admire the work and life of Mr. Eric Lim the head of Asian Tigers Mobility. He has groomed, mentored and guided me all these years.

How did you recruit your first team? How difficult was it to get people on board during the initial stages?

I was keen to take people on my time who were passionate about their career. When you are taking an interview, you can really know it in the first go, who is taking the job for working and who is passionate towards it. I did the same. That is the only reason that most of my team members have been associated with PMR from many years.

Also, it is essential to breathe one’s vision in their employees to help them stay focused and visualize the same dream as yours. It was difficult to bring together people initially but with strong leadership and understanding in inculcated in each of your employee’s DNA’s then people tend to join hands and work with you to grow the company.

What are 3 key things that you have learned as an entrepreneur?

This is something I have always believed in, is that its important to have goals, desires and ambitions, however challenging they seem to be …. And you have got to enjoy the ride to these.

Sometimes on that learning curve we explore ourselves and what we can achieve. It is important to dream and keep yourself always engaged into something that you enjoy and feel passionate about.

There is no formula and no set route to success …just listen to the heart …Sometimes the right ways and answers are found there.

Another major learning for me is that when you really ride on something your courage will eventually kick start your fear. Take the plunge… and you will see the miracles of life.

Also, the most difficult thing is to manage people especially when one is in a service industry. Here we deal with a niche service which is ’emotions’. Hence, we need to be very careful while working with people.

Be it our clients or our employees. Another key take away is that “No success is possible without sacrifices and beliefs, sometimes not yours, but that of the people around you.”

What would you describe as your biggest moments of success in your business?

Every moment was a success to me in my business. Whether it was my failures, it also made me learn new things and is constantly helping me in building up my company.

There have been many moments I felt proud of; pointing out one would be little unfair to the rest of them.

© Naaree.com

Naaree Interviews Aakanksha Bhargava, CEO And President of PM Relocations | Business Tips

Pink Autos: Women Driven Auto Rickshaw Services In India

The growing trend of pink autos – women driven auto rickshaw services in India – is facing both misogyny and support from men and women around the country. Pallavi Bhattacharya reports. 

It’s late at night. You’re returning home from work. The streets are almost empty. You hail the only auto rickshaw that you see on the streets.

The auto rickshaw driver slyly shifts his rear view mirror towards you. Despite, you requesting him not to smoke, he refuses to throw away his cigarette.

His breath smells of alcohol when he enquires in a rough voice, “Madam, what do you mean by coming home so late at night, or are you off to another party from here? Were you at a disc drinking? How do your husband and in-laws allow this? Or are you divorced? Did your parents not teach you any values? What kind of clothes are you wearing anyway?”

The regressive-minded and lecherous auto rickshaw driver, may be driving precariously through the streets and as there is no other transport in sight, you may be anxious as to whether you’ll be reaching home safely. He may be refusing to pull over.

If you’ve ever been in a situation like this, you must have wished that you could have been driven home by a woman driver. There are many male drivers who behave cordially with women passengers and always ferry them to safety, however there are also abusive drivers who may also put your safety at risk.

Auto rickshaws driven by women are already plying in Indore, Ranchi, Bhubaneswar, Delhi, Noida and Gurgaon.

In 2016, an announcement was made that women driven auto rickshaws would be introduced in Mumbai, Navi Mumbai, the Thane District, the Palgarh District, Kalyan, Pune, Nashik, Nagpur and Aurangabad.

548 auto rickshaw permits were issued for women drivers in Maharashtra, which included 465 from Mumbai. Five percent of auto permits in Maharashtra has been reserved for women.

Enduring Misogyny Towards Women Autorickshaw Drivers

Women drivers have had to face misogyny, and female auto drivers across the country have had to combat chauvinism. On asking what they thought about women driving autos, I met a handful of men and women, who passed snide remarks.

A woman whose thought process is laced with internalized misogyny commented, “How can women drive autos? Isn’t it after all a man’s job? Women aren’t good drivers. More so, driving in the sun will tan their skin.”

A woman who echoed her erroneous views remarked, “It seems a bit strange that women will drive auto rickshaws. Men, I believe, are endowed with more physical prowess and perhaps are more naturally equipped to take upon themselves such rough jobs such as bus and auto driving.”

A man, who seemed to feel insecure that women are taking up a profession which traditional India thought was only for men, said, “If women are passionately wanting to take up a man’s role, let men wear sarees like them and live at home, whereas women can roam about in shirt and trousers the whole night.”

A man who was similarly against women being on par with women on the professional front said, “Women joining the workforce is causing unhappiness in families. Working women are the causes of the rising divorce rate, more so if they take up unconventional careers like auto driving, which are meant for men.”

Another chauvinistic man with poor logical reasoning said, “Women are responsible for their own personal safety. They are to blame if they get attacked. So, this women’s driven auto system isn’t going to reduce crimes against women in any way.”

A man with a similar logical fallacy said, “I am vehemently against women auto rickshaw drivers being given safety alarms and self defense equipment during night shifts, as it’ll add fuel to fire to the misconception that no man can be trusted.”

Eshita Mandal, a psychologist from Mumbai, speaking on the bias women auto rickshaw drivers face says, “The moment people see a lady driver out there on the road, they invariably think that the traffic jam or an accident is because of her. When a woman is driving a plane, they wonder if it’ll reach the destination safely. Hats off to women auto rickshaw drivers who have all the courage to step into what was considered a man’s world before.”

Support For Women Autorickshaw Drivers

Most people I talked to, were happy that women would be seen behind the wheels in auto rickshaws.

Apala Bhattacharya, a writer in Mumbai says, “The introduction of auto service with women drivers will take care of two main issues: it’ll be conducive towards ensuring the safety of women commuters and will serve as a livelihood option for women who don’t have high level of education or a college degree. Often these women are engaged in manual labour which involves long and arduous hours of work with low pay. Driving an auto rickshaw will serve as a higher source of income and also flexible hours of work which will be helpful for them to take care of their families as well. This will also open a new avenue of work in a currently male dominated category of work and broaden the choices of women towards a means of livelihood.”

Puripriya Kundu, Guest Lecturer in a university in Kolkata, is yet to avail of this service in her city. Nevertheless she is excited about seeing women earning a living by driving auto rickshaws.

She says, “All genders- men, women and the transgender have the right to drive auto rickshaws. It’s patriarchal to prevent women from driving an auto rickshaw. Driving an auto rickshaw makes a woman her own boss, which is far better than bearing the servitude of many blue collared jobs that women who don’t have higher levels of education have to do. For instance rather than work as a domestic helper in homes, many women may feel that driving an auto rickshaw is a far empowering job.”

She feels that the quota for women drivers may help at the teething phase. Puripriya reasons, “Reservations may be good in the initial stage wherein women are trying to get a foothold in an otherwise male dominated profession.”

Whereas she feels that availing of an auto rickshaw driven by a woman will make travelling at night safe for women passengers, she is also concerned about the safety of the women drivers who ply vehicles at night.

She reasons, “It’s tough for women to restrict themselves to an early evening curfew as they may be having professional and personal commitments. If women have the opportunity to avail of auto rickshaws driven by women at night, then their lives will be less restricted. However the question here is, will women drivers who drive late at night be safe? I feel that women auto rickshaw drivers should form their own union, so that their problems are addressed through it.”

Anil Merani, a journalist and PR from Mumbai says regarding issues of safety of women driving auto rickshaws at night, “I quite welcome this service as I feel that women deserve equal opportunities in livelihood. Why deprive them in this regard? My only concern is whether women auto rickshaw drivers will be safe during late night shifts. Women drivers need to be provided means and mechanisms ensuring their safety if they decide to drive at night. Maybe, the Regional Transport Office (RTO) could test for two weeks if women auto rickshaw drivers are safe at night and make it into a norm if it’s found to be successful.”

Anil feels that women may be cautious while driving, “Thoughts that women cannot drive well were there in the past in India but things are changing now. I’ve often seen women drivers drive more safely than men.”

Many male auto rickshaw drivers I spoke to hailed the fact that more women will drive auto rickshaws. Bansidar Dube, an autowallah in Vasai, feels that women will make excellent auto rickshaw drivers.

He says, “Women have excelled as astronauts and pilots, auto driving is a piece of cake in comparison. Ladies have zoomed vehicles through the sky and space, so shouldn’t they be able to operate an automobile which runs on the ground well?”

He however expresses concern over the possibility that some women may not drive their own vehicles, “I’m very glad that women are being handed auto rickshaw permits. However I’ll be saddened if they rent out their vehicle to a male driver as it’ll completely defeat the purpose of this mission.”

Nitai Naskar, an auto rickshaw driver in Kolkata, is also in support of women earning a living through auto rickshaw driving. He says, “I think it’s a very good idea that auto rickshaws driven by women are being introduced in Mumbai. I’d be glad if the same is done in Kolkata as well. Women have just as much right to earn their living through auto rickshaw driving just as much as men do. I will not be upset if seats are reserved for women auto rickshaw drivers as they have the right to financial independence. I will never restrict any woman in the family from driving an auto rickshaw if they wish to.”

He is however worried about the problems that women drivers in a male dominated work sphere like this usually face. He observes, “I am however concerned about the fact that women auto rickshaw drivers may be eve teased, which is a chauvinistic means of trying to dissuade women from driving auto rickshaws. More male auto rickshaw drivers should come out in support of women driving auto rickshaws.”

An auto rickshaw driver who drives his vehicle in the outskirts of Mumbai, says on the request of anonymity, “Because of safety issues, a woman auto rickshaw driver was unable to continue drives to long distance destinations at night and now just plies her vehicle locally.”

Prospective Lady Auto Rickshaw Drivers Speak Up

Rupali Sutar, whose father drives an auto rickshaw, would also like to drive one. She, who has studied till Class 10, is now is a receptionist in a garment store in a mall. She has previously worked as a beautician in a beauty parlour and in the housekeeping department of a call centre.

She knows that driving an auto rickshaw is more earning than any of these professions, and people she knows are making Rs 1000 per day by driving an auto rickshaw. She is separated from her husband and has a small son. Her husband, according to her, doesn’t provide adequately for both of them. She wishes to earn well to ensure good education and a comfortable bringing up for her child.

She says, “To keep myself safe while driving at night, I plan to carry self defense equipment. I wish to work late at night as I want to help women who are travelling alone. My father owns two auto rickshaws, he drives one himself and has rented out another vehicle to someone else. I will drive the auto rickshaw which is now being rented out and thereby also be able to save the family expenditure which goes into paying the driver. My family is encouraging me greatly in this venture.”

One Woman Auto Rickshaw Driver’s Personal Experience

Anita Kudtarkar, the first woman auto rickshaw driver from Mumbai, interestingly hails from an orthodox village in Karnataka. Her father had a hotel and her mother was a homemaker. In her village school, there were classes for girls only till Class 10. The village’s norm was not to send their daughters out of the village for higher education as it was considered unsafe.

Anita was married off a year after she completed school. The family she married into wasn’t so well off. Her husband was engaged in fitting appliances. She would do various kinds of jobs including tailoring. Ultimately, she decided to drive an auto rickshaw.

Anita says, “Women can operate any type of vehicle. I decided that I’ll do something that no woman has done before in Mumbai, so I became an auto rickshaw driver.” An auto rickshaw cost Rs 85,000 in 2002. Anita didn’t have the money. Her friend who was a retired school principal lent her Rs 25,000. She took a bank loan of Rs 60,000.

Initially there was reluctance to teach her driving, as a misogynistic belief prevailed that women can’t drive well. Once Anita found a trainer she learned driving an auto rickshaw in just eight days. She however practiced on her own for another month before she started taking customers, as she was being cautious.

Male drivers raised eyebrows on seeing a lady with an auto rickshaw. A chauvinistic auto rickshaw driver threw her a challenge, “Women should cook and take care of their homes. Driving isn’t for women. Just ride your auto rickshaw up to 25 meters in front of me. If you can do so then I’ll give up my license.”

Anita not only completed that with élan but went on to drive for many kilometers. Anita told him, “Just look at how many miles I’ve really covered.” Forced to eat the humble pie, he sheepishly said, “Well, I was simply joking.” Anita retorted, “Please don’t joke about women in this manner ever again in your life time.”

When Anita started driving an auto rickshaw professionally, she faced further prejudice. “Initially some people were hesitant to board my vehicle as they had never seen a woman driving an auto rickshaw ever in their lifetime. They wondered if she had a valid license.” Gradually both genders boarded her automobile without inhibitions.

Anita noticed that women were especially comfortable to ride in her vehicle. She however imposed on herself a 7 pm curfew of driving an auto rickshaw. The reason was two-fold. She had to prepare supper for her family and attend to household chores. Second, she felt that it would be unsafe to drive at night as she wasn’t sure at to what kind of passengers would hike a ride.

Anita refutes those who claim that driving auto rickshaw is a rough sport for women saying, “Driving it may seem rough when you’re a novice but once you know how to drive the vehicle, it’s a lovely and smooth run.”

Anita brings to our notice that before the 5% reservation norm, women were hesitant of coming forward to drive an auto rickshaw. This was because as they didn’t see women drive one, they thought that it was just a man’s job or women weren’t permitted to drive one.

She further draws our attention to the fact that despite the fact that 50 women were previously given free training to drive an auto by the Mahanagar Palika in the Vasai – Virar region, not one of those women drove an auto rickshaw.

She’s happy regarding this reservation. Simultaneously she brings to our notice that this reservation is yet to fill up as many women are still not ready to do this job. She feels that the reservation quota may be expanded only after this reservation is completely filled up.

Women commuters across India are happy with this auto rickshaw service but are upset that there are just a few of them. We hope that the supply of women driven auto rickshaws is increased, to meet the increasing demand of the same.

Whereas women driven auto rickshaws are painted pink in other cities, they are to be painted orange in Maharashtra. Women auto rickshaw drivers in Maharashtra however are against their vehicles being painted in a colour which distinguishes their automobiles from those being driven by men.

An auto rickshaw driver said that the orange colour may incite stalkers to follow their vehicles at night, which will put both the driver and passengers in jeopardy. We can only hope that women come forward in large numbers to procure licenses to drive auto rickshaws; and that men make their work environment more comfortable.

Image source: Shashank Anand

Watch the video from MTV Sunsilk Angels of Rock featuring women auto drivers.

Naaree Interviews Aakanksha Bhargava, CEO And President of PM Relocations | Business Tips

10 Legal Tips For Startups In India

roma-priyaRoma Priya is Legal Advisor and Founding Partner at Burgeon Bizsupport LLP, and provides legal assistance in investments for early and growth stage startups and ensures they understand the intricacies of the agreements.

The company is a venture-focused boutique practice that provides cost-effective, experienced and reliable legal advice as well as customized business solutions.

Roma’s objective for Burgeon is to create a ‘one-stop support system’ of services for entrepreneurs and investors. In this article, she offers 10 legal tips that Indian founders should consider when creating their startup.

  1. Choose the right legal structure for your startup

Choosing an appropriate legal structure is one of the most crucial decisions for any startup.

The decision should be taken based on individual circumstances and a host of factors, such as:

  • nature/sector of business operation
  • business trajectory
  • regulatory and tax considerations
  • costs of formation and ongoing administration
  • external capital requirement and type of funding sought
  • extent of legal liability protection required
  • number of stakeholders
  • balance required between ownership and management
  • proposed mechanism for profit sharing or distribution amongst stakeholders etc.

The preferred entity structures for startups in India are limited liability partnership and private limited company.

  1. Registrations and Business Licenses

Post incorporation of a business entity in India, some necessary registrations are required and mandated by law.

Some examples are Permanent Account Number (PAN), Tax Deduction and Collection Account Number (TAN), VAT Registration, Service Tax Registration etc.

Business licenses are permits issued by a government authority that allows startups to start/conduct/continue to operate a particular business within its territorial jurisdiction lawfully.

The nature of business activity determines most license requirements. Other determining factors may include the number of employees, location of business and the form of business ownership.

Some examples are Food safety license, Health/Trade license, Shops & Establishment License etc.

  1. Intellectual Property Protection

Intellectual Property Rights are a very important asset class for a startup. Developing and protecting intellectual property with proper registration can help startups gain competitive advantage.

It is essential to obtain trademark registration for the business name/trade name under the Trademarks Act. Registration of a company or business in India does not by itself give protection against others who might commence using identical or similar marks.

A trademark search should be conducted before deciding on these business name/ trade names to prevent any issues in future including potential infringement.

All Intellectual Property (including trademark, copyright, design, trade secrets, inventions, patents, etc.) should be registered in the name of the entity and not in the name of the promoters/founders of the startup.

  1. Founder Equity – Split and Vesting

Founder equity should be split amongst founders based on the nature of role played by each founder along with their time, effort and capital contribution to the startup.

Splitting founder equity equally by default without a thorough discussion on expectations and contribution generally leads to tension and unhappiness amongst founding teams as the startup matures. Founder Shares should be always subject to vesting schedule – typically over a period of three to four years.

When vesting is imposed on a founder equity, the unvested shares held by the founder become subject to a contractual right to repurchase/transfer often at a nominal value, if one of the founders is terminated or voluntarily leaves the startup. This is very important to ensure future viability of the business.

  1. Founder Agreements

The Founders Agreement is the most valuable tool to establish the relationship between the founders of a startup. The agreement should represent a clear understanding between the founders on all key issues related to the startup.

Founder agreements should clearly mention the roles and responsibilities of the founders and have clauses detailing the decision making and operating structure of the startup, founder equity split with vesting (explained above), assignment of all intellectual property in favour of the startup, termination of a promoter and exit process etc.

  1. Employment Contracts

Startups must ensure to enter into clear employment contracts detailing terms and conditions of employment with their employees.

While employment contracts are certainly valuable to the employees as it details terms regarding description of job profile, compensation and other associated benefits, a number of clauses may be inserted to safeguard and protect the interest of the startup, such as:

  • stopping employees from setting up competing entities (non- compete clause)
  • poaching other employees/clients/customer (non-solicitation clause)
  • preventing employees from claiming any intellectual property right on the work done/developed during the course of employment (assignment of intellectual property rights).
  1. Employee Stock Option Pool (ESOP)

ESOP’s are incentives given to employees/directors of a company to attract talent and retain employees by rewarding them. ESOPs create a sense of ownership amongst employees.

It is important to note that ESOPs are not shares. They are structured in a way that they are option to buy shares at a discounted price and can be exercised only after a certain vesting period which is decided by the company granting the ESOPs.

In India, we typically see a pool of 10% to 15% allocation towards an ESOP Pool.

  1. Third Party Agreements

Prior to entering into a third-party agreement and while negotiating the terms, it is advisable to execute a non-disclosure agreement.

If creation or development of intellectual property is a component of such a third party agreement, it must clearly state that all rights to the intellectual property rights shall vest and be owned by the startup and the third-party shall not stake any claim on the same and will do all acts to ensure the protection of the intellectual property.

Clauses related to breach, termination and dispute resolution should be well negotiated and captured in all third-party agreements.

  1. Investment Structuring

One of the most challenging and time consuming aspects of operating a startup is to raise capital for working capital requirement and growth.

In India, Investors (HNIs/Angels/Funds) invest in early and growth stage companies in different structures and on varied terms.

It is imperative for startups to seek proper legal advice while negotiating the deal terms for investment and the rights of the investors.

Typically, as a process an intention document detailing the structure of the transaction called the Term sheet is executed followed by due diligence of the startup and execution of investment related definitive agreements.

  1. Compliance Management

Compliance and its importance is often overlooked by many startups.  There are multiple laws applicable to specific entity structures under which separate event based and annual compliance is mandated.

It is extremely critical for the sustainable growth of any business that the startup is in compliance with legal, secretarial, accounting, taxation, employee related and other associated compliances.

The consequences of non-compliance can be levy of punitive fines on the startup.