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.
While down rounds can be concerning, they’re not always the end of the road. Many companies bounce back after a down round; it's just another bump in the journey!
A down round can sometimes put a damper on spirits within the company, but it can also be a rallying point to make things better. It’s like weathering a storm; you’ll come out stronger on the other side!
Existing investors may find their stake diluted, meaning they own a smaller piece of the pie now, even if the pie doesn’t change in size. It's like slicing the same cake into more pieces!
A down round typically happens when a company faces challenges, maybe the market is tough, or the business didn’t perform as expected. It's a bit like needing to take a step back before moving forward.