developed by Gust, the platform powering over 90% of the organized angel investment groups in the United States.
The goal was to standardize on a single investment structure, eliminate confusion and significantly reduce the costs of negotiating, documenting and closing an early stage seed investment.
For those familiar with early stage angel transactions, this middle-of-the-road approach is founder-friendly and investor-rational, intended to strike a balance between the Series A Model Documents developed by the National
Venture Capital Association that have traditionally been used by most American angel groups (which include a 17 page term sheet and 120 pages of supporting documentation covering many low-probability edge cases), and the one page Series Seed 2.0 Term Sheet developed in 2010 by Ted Wang of Fenwick & West as a contribution to the early stage community (which deferred most investor protections and deal specifics until future financing rounds.)
The Gust Series Seed Term Sheet does meet Section 2.2 of the Founder Friendly Standard. The term sheet providesfor "reverse vesting"so the company can repurchase unvested stock if a Founder leaves before four years.
Annotated with detailed notes to help you understand each aspect of the Term Sheet."
Connecticut Gust Series Seed Term Sheet is a legal document that outlines the terms and conditions for investors and entrepreneurs involved in the startup ecosystem. This term sheet is specifically designed for seed stage investments in the Connecticut region, facilitating the funding process for early-stage startups. The Connecticut Gust Series Seed Term Sheet aims to protect the rights of both the investors and the entrepreneurs during the seed funding round. It includes detailed provisions and conditions related to investment amount, valuation, ownership stake, governance rights, and liquidation preferences. This term sheet also includes essential clauses related to anti-dilution, preemptive rights, voting rights, and information rights. It provides clarity on the rights and responsibilities of the investors and entrepreneurs, ensuring transparency and building a strong foundation for the future growth of the startup. In Connecticut, there are different types of Gust Series Seed Term Sheets available, adapted to the specific needs and preferences of investors and entrepreneurs. These variations may include: 1. Standard Gust Series Seed Term Sheet: This is the commonly used term sheet in Connecticut for seed stage funding. It outlines the standard terms and conditions that investors and entrepreneurs agree upon, ensuring a fair and equitable investment process. 2. Convertible Note Gust Series Seed Term Sheet: This term sheet is designed for startups seeking seed funding through convertible notes. It includes provisions related to note conversion, interest rates, maturity dates, and other specific terms associated with convertible notes. 3. SAFE (Simple Agreement for Future Equity) Gust Series Seed Term Sheet: This term sheet is tailored for startups opting for seed investment through the SAFE instrument. It outlines the terms of the SAFE agreement, including the valuation cap, discount rates, and conversion triggers. 4. Preferred Equity Gust Series Seed Term Sheet: This type of term sheet caters to startups planning to issue preferred equity shares to seed investors. It includes provisions related to preferred stock rights, dividend rights, and liquidation preferences. Overall, the Connecticut Gust Series Seed Term Sheet provides a comprehensive framework for seed stage investments, ensuring clarity, fairness, and legal protection for both the investors and the entrepreneurs. It serves as a crucial document in the startup ecosystem, facilitating the growth and development of innovative companies in Connecticut.
