Alaska Angel Fund Promissory Note Term Sheet

• Category: Small Business - Investment or Funding
• State: Multi-State
• Control #: US-ENTREP-004-1
• Format: Word; Rich Text

Description

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 Fund Promissory Note Term Sheet is a comprehensive agreement template utilized by the Alaska Angel Fund to outline the terms and conditions of a loan provided to startup companies or entrepreneurs. This document serves as a legally binding contract, setting forth the obligations and promises made by both parties involved. The term sheet includes various key elements and provisions that define the terms of the loan. Some essential components covered in the Alaska Angel Fund Promissory Note Term Sheet include: 1. Loan Amount: Specifies the principal amount that the Alaska Angel Fund is willing to lend to the borrower. 2. Interest Rate: Stipulates the annual interest rate at which the loan will accrue interest. This determines the cost of borrowing for the borrower. 3. Repayment Terms: Outlines the repayment schedule, including the frequency of payments, due dates, and the method of repayment (e.g., monthly installments). 4. Maturity Date: Indicates the date on which the loan is required to be fully repaid, allowing the borrower to plan their repayment strategy accordingly. 5. Collateral: Specifies any assets or securities to be pledged as collateral, providing security to the Alaska Angel Fund against default or non-payment. 6. Default and Remedies: Describes the consequences that may occur if the borrower fails to honor the terms of the loan, including possible penalties or legal actions. 7. Terms of Conversion: If applicable, this section outlines the terms and conditions under which the loan can be converted into equity ownership in the borrower's company, potentially enabling the Alaska Angel Fund to become a shareholder. It is worth noting that there might be variations of the Alaska Angel Fund Promissory Note Term Sheet tailored to specific investment scenarios or industries. For instance, different term sheets could be designed for technology startups, biotech ventures, or sustainable energy projects, considering the unique requirements and risks associated with each respective field. In conclusion, the Alaska Angel Fund Promissory Note Term Sheet serves as a vital document for startups or entrepreneurs seeking funding from the Alaska Angel Fund. By clearly defining the loan terms and conditions, this agreement ensures transparency and sets the expectations of both parties involved, ultimately facilitating a successful financial partnership.