This document is a checklist for a venture capital term sheet. It addresses each component of a venture capital term sheet and discusses the requirements of each. Among the topics covered are: type of securities to be issued, dividends and distributions, liquidation preference, conversion features, and redemption features.
Maine Venture Capital Term Sheet Guidelines Checklist
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How to fill out Venture Capital Term Sheet Guidelines Checklist?
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FAQ
VC term sheets typically include the amount of money being raised, the types of securities involved, the company's valuation before and after the investment, the investor's liquidation preferences, voting rights, board representation, and so much more.
Founders who receive a term sheet need to understand, from a legal perspective, how to manage the process. Key provisions of a VC term sheet include: investment structure, key economic terms, shareholder agreements, due diligence, exclusivity and closing.
Once you're certain the investors offering you a term sheet are a good match, go beyond the obvious. Investment dollars and valuation are critical, of course, but don't overlook important details like option pools, liquidation preferences and the composition of your board.
Key Takeaways The company valuation, investment amount, percentage stake, voting rights, liquidation preference, anti-dilutive provisions, and investor commitment are some items that should be spelled out in the term sheet.
The company valuation, investment amount, percentage stake, voting rights, liquidation preference, anti-dilutive provisions, and investor commitment are some items that should be spelled out in the term sheet.
But no matter who the investor is, a term sheet will always contain six key components, including: A valuation. An estimate of what a company is worth as an investment opportunity. ... Securities being issued. ... Board rights. ... Investor protections. ... Dealing with shares. ... Miscellaneous provisions.
Venture Capital Equity Financing Documents Term Sheet. Stock Purchase Agreement (SPA) Disclosure Schedule for a SPA. Voting Agreement. Investor Rights Agreement (IRA) Right of First Refusal / Co-Sale Agreement. Certificate of Incorporation. Venture Capital Financing Documents on AngelList.