Comprehensive CFO Support for a Fintech Company – Volume 1

Background

Entrust was engaged by a fintech startup from its very inception, providing comprehensive financial and advisory services that laid the foundation for its growth and success. We worked with them from inception to strategic acquisition, through 3 fund raising rounds. 

Our Role

The mandate encompassed critical accounting and reporting tasks, including ensuring regulatory compliance. Entrust worked closely with the startup’s promoters to establish robust financial processes and provided strategic advice on key decisions during pivotal moments in the company’s journey. 

End-to-End Financial Support:

 Entrust effectively served as the startup’s entire finance wing, managing all financial operations seamlessly from the early seed funding stage to a landmark strategic acquisition by a global multinational corporation. 

Strategic Partnership:

By partnering closely with the founders, Entrust played a crucial role in decision-making processes, offering insights that helped the company navigate challenges and capitalize on opportunities. 

Transitioning Post-Acquisition:

 Following the acquisition, Entrust ensured a smooth transition by assisting in setting up an in-house finance team for the company. This meticulous handover ensured continuity and maintained the high standards of financial management established during Entrust’s tenure. 

Throughout this engagement, Entrust’s CFO support services played a vital role in helping the fintech company establish strong financial controls, ensure compliance, and make informed strategic decisions. Our expertise in fintech financial management enabled the company to optimize cash flow, mitigate risks, and implement best practices in financial governance. Additionally, we ensured financial compliance for startups, helping the company navigate regulatory complexities and maintain adherence to evolving financial regulations.

Impact

Entrust’s comprehensive approach not only supported the startup’s operational needs but also contributed significantly to its strategic milestones, from securing funding to achieving a successful exit.  

This case exemplifies Entrust’s commitment to empowering startups with tailored financial solutions and strategic expertise, ensuring long-term growth and seamless transitions.

1.Case Study – Enabling the Successful Launch of a Venture Capital Fund in India

Background

Entrust played a pivotal role in supporting the establishment of a new 1000 crore venture capital fund in India, launched by a prominent Silicon Valley-based investment firm. This fund is dedicated to fostering the startup ecosystem, with a particular focus on deep tech companies. 

Our Role

Entrust was entrusted with a wide spectrum of responsibilities crucial to the successful launch and operation of the fund. These included: 

Entity Setup:

Assisting in the formation of legal entities to align with regulatory requirements. 

Legal Documentation:

Drafting and reviewing key legal documents in coordination with external counsel. 

Compliance Coordination:

Engaging with tax and legal advisors to ensure regulatory adherence. 

Audit Facilitation:

Hosting auditors and providing necessary financial documentation. 

Account Management:

Opening demat and custody accounts. 

Registrar & Transfer Agent (RTA) Appointment:

Facilitating the selection and onboarding of the RTA. 

Investor Onboarding Challenges

One of the most critical and complex aspects of the engagement was the onboarding of esteemed institutional investors. These investors had stringent due diligence processes and high expectations, necessitating: 

• Extensive documentation and regulatory compliance. 
• Detailed clarifications and negotiations on agreement terms. 
• Seamless coordination to meet tight deadlines and expectations. 

Execution Excellence 

Entrust’s team members engaged with industry leaders and meticulously addressed critical points of contention. Their strategic approach played a key role in securing investor commitments, leading to the fund’s successful first close. 

Impact

The client team expressed appreciation for Entrust’s contributions, particularly in areas such as budgeting, bookkeeping, and maintaining regular operational cadence. By going beyond routine tasks and offering strategic insights, Entrust continues to play a critical role in enabling the growth and success of venture capital initiatives in India.

2. Case Study – Tax Advisory for some of our Single Family Offices

Background

Some of our clientele include prominent Single Family Offices (SFOs) managing diverse assets across different geographical locations. These clients usually have distinct entities operating under their umbrella and require a comprehensive tax advisory service to optimize their tax liabilities and achieve significant savings while ensuring legal compliance.

The objective for such clients is mostly to devise a tax strategy that could: 

1. Optimize the tax burden across all entities. 
2. Ensure compliance with Indian tax regulations. 
3. Maximize the client’s philanthropic deductions. 

Our Role

We have provided solutions in the following areas across different clients: 

Change in Accounting Methodology:

Entrust assisted the client in re-evaluating and modifying the accounting methodology. This change facilitated better tax savings, ensuring that the financial structure was aligned with the latest tax laws, enabling optimal deductions. 

Building a Corpus Outside India:

Entrust advised the client on the strategic decision to build a corpus outside India, particularly in tax-friendly jurisdictions such as the Cayman Islands. Our team ensured the necessary tax compliance for offshore investments, effectively managing cross-border taxation issues while adhering to international financial regulations. 

Ring-Fencing of Entities:

 One of the SFOs operated with four separate entities, each having its unique financial dynamics. Entrust helped in the optimal ring-fencing of these entities to ensure tax-efficient structures. By segregating the risks and income streams, we were able to reduce the potential tax exposure while providing clear financial visibility and protection. 

Philanthropic Planning:

A key component of the client’s wealth strategy was philanthropy. Entrust played a pivotal role in structuring the client’s philanthropic donations in a manner that allowed them to claim the maximum allowable tax deductions. This involved identifying charitable entities and causes that could yield tax benefits while aligning with the client’s values. 

Impact

Entrust’s interventions resulted in tax savings of approximately ₹2 to ₹2.5 crores for one of our family office clients. The tax-efficient structures put in place not only minimized tax liabilities but also provided the client with greater flexibility in managing their financial operations across borders. 

Through a combination of strategic accounting changes, international asset structuring, and thoughtful philanthropic planning, Entrust has been able to deliver substantial tax savings for its SFO clients. Our approach is holistic, ensuring that all aspects of the family office’s financial operations are optimized for both compliance and tax efficiency, resulting in a comprehensive financial solution that meets the client’s long-term wealth management goals.