Maryland 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.

Maryland Angel Fund Promissory Note Term Sheet is a legal document that outlines the terms and conditions of a loan provided by the Maryland Angel Fund to a startup or early-stage business. This term sheet serves as a preliminary agreement between the investor and the borrower, laying the foundation for the formal promissory note. The Maryland Angel Fund Promissory Note Term Sheet covers various important aspects of the loan agreement, specifying terms such as the loan amount, interest rate, repayment schedule, maturity date, and any collateral or personal guarantees required. It defines the responsibilities and obligations of both parties, ensuring transparency and clarity throughout the lending process. Depending on the specific needs and nature of the investment, there may be different types of Maryland Angel Fund Promissory Note Term Sheets available. These variations can be tailored to accommodate unique circumstances or address specific preferences. Some possible types include: 1. Standard Term Sheet: This is the most common type, providing a comprehensive overview of the loan terms, repayment details, and associated conditions. 2. Convertible Note Term Sheet: This type of term sheet incorporates the possibility of converting the loan into equity in the future, typically during a subsequent funding round or upon reaching certain milestones. 3. Preferred Equity Term Sheet: In cases where the investor seeks preferred stock or equity participation instead of a traditional loan, this term sheet outlines the terms and rights associated with the investment. 4. Bridge Loan Term Sheet: When a company needs short-term financing before a larger funding round, a bridge loan term sheet is used. It details terms such as the interest rate, repayment conditions, and conversion options. These different types of Maryland Angel Fund Promissory Note Term Sheets allow flexibility and customization to cater to the specific requirements of the investor and the startup or early-stage company seeking funding. It is crucial for both parties to review and negotiate the terms before finalizing the promissory note to ensure mutual agreement and understanding.