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Sagnik (Management Trainee)     29 February 2012

Venture capital

Hello, how much claim does a venture capital firm has on the appreciation of goodwill in the brand that it had invested in ?



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 1 Replies

S C KHOSLA (Ex - Scientist `F`& Head (SPPD))     01 March 2012

I am trying to answer ur query. May be it may help u in deciding further. ur query is akin to assessing sweat equity shares.

Sweat equity shares are alike Employee stock options with a one year vesting period.

In case of listed companies on BSE/NSE/any recognized  stock exchange, the sweat equity shares are to be issued as per guidelines of SEBI.

In case of unlisted companies , sweat equity shares can be issued as prescribed. However it can not be issued before one year of commencement of operations and there is cap of 15 % that can be issued without a specific central govt approval.

In any case, do not overvalue and fairness should not be compromised. 

Kindly read Section 79 A of Companies Act before you decide.


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