Guam 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 Guam Angel Fund Promissory Note Term Sheet is a legal document that outlines the key terms and conditions of a loan agreement between the Guam Angel Fund and an entrepreneur or borrower. This document ensures transparency and provides a comprehensive understanding of the terms, which helps protect both parties involved. The term sheet serves as a foundation for further negotiations and discussions between the Guam Angel Fund and the borrower. It sets the stage for the loan agreement's finalization and includes details such as the loan amount, interest rate, repayment duration, collateral requirements, and any other specific terms unique to the loan. Different types of Guam Angel Fund Promissory Note Term Sheets can exist depending on the purpose of the loan or specific circumstances. Some common variations may include: 1. Startup Term Sheet: This term sheet caters to early-stage startups seeking financial support from the Guam Angel Fund. It may incorporate additional provisions related to milestone-based funding, equity conversion options, or provisions unique to startups. 2. Growth Capital Term Sheet: Designed for established companies experiencing growth opportunities, this term sheet may focus on providing financing for expansion plans, acquisition opportunities, or market penetration strategies. 3. Bridge Financing Term Sheet: This type of term sheet addresses short-term financing requirements faced by businesses, acting as a temporary solution until a larger funding round or financing option becomes available. It commonly includes conversion rights or terms related to future financing rounds. 4. Convertible Note Term Sheet: In situations where the loan can convert into equity at a later stage, such as during a future funding round, a convertible note term sheet is used. This type outlines the loan's terms, including conversion mechanisms, valuation caps, and discount rates for equity conversion. These different variations allow the Guam Angel Fund to tailor the term sheet to meet the specific needs and requirements of entrepreneurs and businesses seeking funds. It allows for flexibility and considers the unique circumstances faced by borrowers, ensuring a customized approach to lending while maintaining the Guam Angel Fund's best interests.