An angel investor or angel (also known as a business angel or informal investor) is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. New start-up companies often turn to the private equity market for seed money because the formal equity market is reluctant to fund risky undertakings. In addition to their willingness to invest in a start-up, angel investors may bring other assets to the partnership. They are often a source of encouragement; they may be mentors in how best to guide a new business through the start-up phase and they are often willing to do this while staying out of the day-to-day management of the business.
Term sheet is a non-binding agreement setting forth the basic terms and conditions under which an investment will be made.
The Alaska Angel Investment Term Sheet is a legal document used in the context of start-up financing, specifically in the state of Alaska, United States. It serves as a preliminary agreement outlining the terms and conditions of an investment deal between angel investors and entrepreneurs seeking capital for their early-stage ventures. The term sheet plays a pivotal role in defining the rights, responsibilities, and expectations of both parties, paving the way for further negotiations and eventually the drafting of a formal investment agreement. Keywords associated with the Alaska Angel Investment Term Sheet include: 1. Angel investment: Refers to the infusion of capital by high-net-worth individuals or angel investors into promising start-up companies in exchange for an ownership stake. 2. Start-up financing: The process of raising funds to support the initial stages of a new business, typically involving high-risk and high-growth potential ventures. 3. Preliminary agreement: The term sheet acts as a preliminary agreement that outlines the key terms and conditions of the proposed investment deal. It outlines the main points of agreement reached between the investor and the entrepreneur. 4. Terms and conditions: The term sheet specifies the terms and conditions of the investment, including the amount of investment, valuation of the company, ownership percentage, and any other financial or non-financial terms deemed essential to the deal. 5. Rights and responsibilities: The term sheet establishes the rights and responsibilities of both the investor and the entrepreneur. This includes provisions related to the governance of the company, decision-making powers, and any specific preferences or restrictions on the investment. 6. Expectations: The term sheet clarifies the expectations of both parties regarding the future of the company, its growth trajectory, and potential exit strategies. This often includes provisions related to the anticipated timeline for the investment and the desired return on investment for the angel investor. 7. Negotiations: While the term sheet acts as a preliminary agreement, it also serves as a starting point for further negotiations between the parties. The document may undergo revisions and refinements during this negotiation stage until a mutually acceptable investment arrangement is reached. 8. Investment agreement: Once the term sheet is finalized and both parties are satisfied with the proposed terms, the next step typically involves the drafting and execution of a formal investment agreement. This agreement incorporates the provisions outlined in the term sheet and adds further legal detail to protect the interests of both parties. While specific types of Alaska Angel Investment Term Sheets may vary depending on the preferences and negotiation dynamics of the parties involved, the fundamental purpose of the document remains the same — to outline the key terms, rights, responsibilities, and expectations of an angel investment deal in the state of Alaska.
