North Dakota Angel Fund Promissory Note Term Sheet

• Category: Small Business - Investment or Funding
• State: Multi-State
• Control #: US-ENTREP-004-2
• 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 North Dakota Angel Fund Promissory Note Term Sheet is a legally binding document that outlines the terms and conditions of a loan provided by the North Dakota Angel Fund to an individual or company seeking financial assistance for their business or startup ventures. This term sheet serves as a precursor to the final loan agreement and highlights the key provisions and expectations of the loan. Key provisions typically included in the North Dakota Angel Fund Promissory Note Term Sheet are the loan amount, interest rate, repayment terms, and any additional fees or charges associated with the loan. The term sheet also outlines the security or collateral required, the disbursement schedule of the loan, and any potential options for early repayment or conversion to equity. Types of North Dakota Angel Fund Promissory Note Term Sheets may vary depending on the specific program or funding initiative. Some common types include: 1. Traditional Promissory Note Term Sheet: This is the standard term sheet where the loan amount, interest rate, and repayment terms are outlined in detail. It follows a conventional lending approach and focuses on financial aspects of the loan. 2. Convertible Promissory Note Term Sheet: This term sheet is used when the lender has the option to convert the loan into equity in the borrower's company at a later stage, such as during a future funding round or exit event. It includes specific provisions related to conversion terms, valuation caps, and discount rates. 3. Revenue-Based Promissory Note Term Sheet: In this type of term sheet, the repayment of the loan is tied to the borrower's future revenue. The repayment amount is calculated based on a fixed percentage of the borrower's revenue until the loan is fully repaid. 4. Participating Promissory Note Term Sheet: This term sheet includes additional provisions allowing the lender to receive a share of the borrower's future profits or revenue in addition to the repayment of the loan amount and interest. It is important for borrowers and lenders to thoroughly review and negotiate the North Dakota Angel Fund Promissory Note Term Sheet before finalizing the loan agreement. This document serves as the foundation for the loan transaction and helps establish the expectations and obligations of both parties involved.