Form 4: Accel India Funds Distribute Freshworks Shares to Partners

Accel India III, Accel Growth FII, and Accel India IV distributed a total of 4,665,040 Class A common shares of Freshworks Inc. to their respective partners on November 21, 2024.

Summary

• Accel India III (Mauritius) Ltd, Accel Growth FII (Mauritius) Ltd, and Accel India IV (Mauritius) Ltd, all related to the venture capital firm Accel, distributed shares of Freshworks Inc. to their partners.
• The distributions occurred on November 21, 2024, and involved a total of 4,665,040 Class A common shares.
• Accel India III distributed 2,000,000 shares, Accel Growth FII distributed 2,000,000 shares, and Accel India IV distributed 665,040 shares.
• These distributions were made without consideration, meaning the partners did not pay for the shares.
• The distributions were made in accordance with exemptions under Rules 16a-13 and 16a-9 of the Securities Exchange Act of 1934.
• The shares were distributed to the partners representing each partner's pro rata interest in the shares held by the respective Accel entities.

Sentiment

Score: 6

Explanation: The document describes a routine transaction, a distribution of shares to partners, which is neither particularly positive nor negative. The sentiment is neutral to slightly positive due to the standard nature of the event.

Positives

• The distribution of shares to partners could be seen as a positive move, potentially aligning the interests of the partners with the performance of Freshworks.
• The distributions were made in accordance with regulatory exemptions, indicating compliance with securities laws.

Risks

• The distribution of a large number of shares could potentially increase the supply of Freshworks stock in the market, which could have a short-term impact on the share price.
• The document does not provide any information about the partners' intentions with the distributed shares, which could introduce uncertainty.

Industry Context

This transaction is typical for venture capital firms that distribute shares to their limited partners after a company they invested in goes public. It is a standard part of the lifecycle of venture capital investments.

Comparison to Industry Standards

• The distribution of shares to limited partners is a common practice in the venture capital industry after a portfolio company goes public.
• Similar distributions have been observed with other venture-backed companies post-IPO, such as those by Sequoia Capital, Andreessen Horowitz, and Kleiner Perkins.
• The scale of the distribution, involving over 4.6 million shares, is significant but not unusual for a company of Freshworks' size and stage.

Stakeholder Impact

• The distribution of shares could potentially impact the share price of Freshworks, although the extent of the impact is uncertain.
• The partners of the Accel funds are the primary stakeholders directly affected by this transaction.

Key Dates

Keywords

Freshworks, Accel India, Share Distribution, Class A Common Stock, Securities Exchange Act, Partnership, Form 4, Beneficial Ownership