This sample form, a Down-Round Term Sheet document, is usable for corporate/business matters. The language is easily adaptable to fit your circumstances. You must confirm compliance with applicable law in your state. Available in Word format.
Open and honest communication with stakeholders is key, along with a solid plan to improve. It’s like plotting a course through rough waters—stay steady and focused on the destination.
Absolutely! Negotiation is part of the game. It’s like haggling at a market—everyone wants to walk away happy with their deal.
A down round term sheet usually includes valuation, the amount being raised, share types, and any special rights for investors. It’s like a rulebook that everyone agrees to play by.
A down round can create uncertainty among employees, which is tough. It’s like a dark cloud hanging over the office mood, but clear communication can help keep things on track.
Existing investors might find their ownership percentage diluted, which can feel like a bit of a sting. Their investment is worth less on paper, but it doesn't mean all hope is lost.
Companies may face a down round when their growth doesn't meet expectations, or market conditions aren't favorable. It's like having a rainy day—sometimes you have to regroup and figure things out.
A down round term sheet is a legal document that outlines the terms of a new funding round for a startup, where the company's valuation is lower than it was in previous rounds. It's a bit like starting fresh but with a little bit of a reality check.