The Pre-Fundraising Compliance Challenge
Brightpath Learning had built an impressive product and user base over 2 years, but their financial and legal structure was that of a bootstrapped sole proprietorship — completely unsuitable for institutional funding.
When their lead investor conducted preliminary diligence, they flagged:
- No separate legal entity (IP owned personally by founder)
- No audited financials for any year
- No formal founder agreements or IP assignment
- No ESOP pool for team incentivisation
- Proprietary content not formally assigned to any entity
The investor gave a 90-day window to clean up the structure before proceeding with term sheet.
Our 90-Day Restructuring Plan
Month 1 — Incorporation & IP Transfer
- Incorporated Brightpath Learning Pvt Ltd
- Assigned all IP, contracts, and domain to the new entity
- Filed DPIIT Startup India application
Month 2 — Financial Reconstruction
- Prepared 3 years of provisional accounts
- Engaged auditors for statutory audit
- Applied for 80IAC tax holiday
Month 3 — ESOP & Governance
- Drafted ESOP policy and trust deed
- Created 10% ESOP pool
- Prepared shareholders agreement and investment-ready data room