Hi, thanks for writing in. As per some publicly available explanations by Tyke employees and also companies raising these funds, the startup creates a provision in its books periodically to account for the increased (potential) payout liability.

Tushaar Talwar

Thanks for your inputs Seemant, always appreciate your balanced view.

Tushaar Talwar

Thank you for the kind words, Baskaran.

Tushaar Talwar

Hi Karnik, thank you for your kind words. The startups generally ‘apply’ to the platform to hold a fundraiser (Tyke has a separate page for it). The application form has series of questions around traction, team, revenues, etc. accompanied by a pitch deck. Hence, the barriers are entirely at the discretion of the platform. The platforms do not provide details of any specific diligence conducted for listing the fundraising campaigns.

Tushaar Talwar

Hi Avnee, thank you for your kind words. In the fixed income space, there are different models going around: the NCD (non-convertible debenture) route has become regulated with Sebi's mandate to register as security brokers, but the other business models, asset financing, invoice discounting, etc. are not regulated as they are not securities.

Tushaar Talwar

Hi Neha, thanks for your feedback. There is no publicly available information on any exit from investments made on these platforms (speaking specifically of CSOPs). However, this is not surprising since the fundraisers are all within the last one year and the documentation indicates the exit is, in most circumstances, discretionary at the option of the company. Another pertinent question is whether institutional investors are aware of these payouts to subscribers of these instruments (which will run into several crores)? And what are the remedies in case the company reneges or rescinds from its obligations? Where will the retail investors go? Since the investment seems to be booked as 'revenue' for service consideration, will the retail investor face the absurd proposition of approaching the consumer courts for remedies? Lots of potential issues from how these instruments are structured.

Tushaar Talwar

Hi Srikanth, thanks for the feedback. The startups generally 'apply' to the platform to hold a fundraiser, the biggest platform has an application form with series of questions around traction, team, revenues, etc. accompanied by a pitch deck. Hence, the barriers are entirely at the discretion of the platform. The platforms do not provide details of any specific diligence conducted for listing the fundraising campaigns.

Tushaar Talwar

Hi Vibin - the mention of IPV was in relation to advertisements on Shark Tank and reduction in ticket sizes. IPV does not do the innovative instruments that Tyke does. Separately, yes IPV also has Sebi-registered AIFs with higher prescribed minimum investment thresholds.

Tushaar Talwar