At its core, **accretion** refers to a gradual increase in value over time. In finance, this concept manifests across several domains, such as:
1. **Accounting:** Recognising the incremental growth of revenues or assets.
2. **Bonds:** Capturing the capital gains as discounted bonds approach maturity.
3. **Corporate Finance:** Measuring the incremental value generated from mergers and acquisitions (M&A).
Pre-emptive rights offer peace of mind. You’re not left at the mercy of dilution when the company raises additional capital. This lets you make informed investment decisions, knowing your stake remains protected. Additionally, pre-emptive rights can provide a strategic advantage when negotiating investment terms with startups. By emphasising the value you bring as a long-term investor, you can potentially secure more favourable terms for your initial investment.
Pre-emptive rights are an invaluable tool for navigating the dynamic world of Indian startups. They empower you to protect your investment, maintain influence within the company, and potentially maximise your returns. As an Angel Investor or VC, understanding and strategically leveraging pre-emptive rights can be the difference between a successful investment and a diluted stake. Remember, a well-protected investment is a foundation for long-term success in the exciting Indian startup market.