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Understanding Conversion and Dividend Rights In Early-Stage Investments - A Simple Guide for First-Time Founders
This article was written by Karthik Jayakumar, Partner. When early-stage founders raise capital in India, especially through instruments like compulsorily convertible preference shares (CCPS) or compulsorily convertible debentures (CCDs), they often encounter two terms that shape the economics of the deal: conversion rights and dividend rights (not relevant for CCDs). Despite appearing technical, these rights influence how much of your company an investor ultimately owns and
Feb 35 min read
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