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.
Absolutely! Many companies bounce back after a down round, learning from their experiences and making strategic changes. It’s all about getting back on the horse and staying positive.
Companies should weigh the risk of dilution, loss of control, and potential negative perceptions from the market. It’s like stepping into a double-edged sword situation.
Employee stock options can lose value if the company's worth drops. It’s a bumpy road, but the hope is that things turn around down the line.
Yes, often there are preferential terms like increased voting rights for new investors or adjustments to existing investment agreements. It’s like giving the new kids on the block a bit of extra power!
Existing investors may find the value of their shares diluted. It can feel like a bitter pill to swallow, but it’s sometimes necessary for the company's survival.
Sometimes companies hit a rough patch or the market takes a dive, leading them to raise funds at a lower valuation. It's a way to keep the lights on and carry on!
A Down Round Term Sheet is a document outlining the terms of a financing round where the company's valuation is lower than in previous rounds. It's like resetting the playing field when times get tough.