Cross-Border Stock Swap: Panacea For Startup Fund Crunch?

On the first anniversary of the startup policy, and as a possible outcome of the 2017 budget, startups were looking at the central government with hope. Startup funding has slowed down drastically, with recent reports suggesting that funding in 2016 has declined by more than 50 percent. Several well-known startups with proven business models and ideas have either folded or are declining rapidly. History has proven, time and again, that lack of funding can stymie the growth of start-ups which otherwise would have turned out as winners. In such a situation, having the ability to consolidate with other companies, by using stock as currency (i.e. stock swaps), will be a major boost for startups to salvage their business. Simply put, a stock swap is a mechanism where shares are purchased by an acquirer in consideration for other shares, instead of providing cash consideration.