Connecticut 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.

Connecticut Angel Fund Promissory Note Term Sheet: A Comprehensive Overview The Connecticut Angel Fund Promissory Note Term Sheet is a vital legal document that outlines the key terms and conditions associated with the investment of angel funds in a startup or early-stage company located in Connecticut. It serves as a preliminary agreement between the angel investor(s) and the recipient company, paving the way for a more detailed investment agreement. Keywords: Connecticut, Angel Fund, Promissory Note, Term Sheet, investment, startup, early-stage company, angel investor. This term sheet typically covers crucial aspects related to the investment, including but not limited to: 1. Investment Amount: Specifies the total investment committed by the angel fund, typically written as a monetary figure or a range. 2. Valuation: Determines the pre-money valuation of the recipient company, indicating its worth before the investment. 3. Convertible Note: Outlines whether the investment will be structured as a convertible note, allowing the investor to convert their investment into equity at a later date. 4. Interest Rate: Addresses the fixed or variable interest rate charged on the principal investment amount, determining the return for the angel investor. 5. Maturity Date: Indicates the date by which the promissory note must be repaid in full, including any accrued interest. 6. Repayment Terms: Specifies how and when the principal and accumulated interest will be repaid, including repayment frequency and potential repayment methods (e.g., lump sum, installment basis). 7. Equity Conversion Terms: If the investment is convertible, this section defines the terms, conditions, and triggers for the conversion of the note into equity. 8. Default Provisions: Outlines the consequences and remedies if the recipient company fails to fulfill its obligations specified in the promissory note. 9. Investor Rights: Clarifies the rights granted to the angel investor(s), such as information rights, participation rights, and approval rights over significant corporate actions. 10. Governing Law: States the jurisdiction and laws applicable to the agreement, typically governed by the laws of the State of Connecticut. Different types of Connecticut Angel Fund Promissory Note Term Sheets may exist, tailored to specific categories or niches within the startup ecosystem. Some variations may include terms specifically designed for high-tech startups, healthcare ventures, service-based companies, or companies aligned with Connecticut state economic development priorities. To ensure the specific needs of both the angel investor(s) and the recipient company are met, it is strongly advised to consult legal professionals experienced in angel investing and the particular regulations and requirements applicable in Connecticut.