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.
The key takeaway is to stay focused on the long-term vision. A down round is a bump in the road, not the end of the journey. Keep your eyes on the prize!
Absolutely. A down round can make a company look less stable or like it's in trouble. It’s like a cloud that hangs over the business, but there's always a silver lining.
Look out for provisions like anti-dilution clauses, liquidation preferences, and preemptive rights. These are like safety nets for investors in uncertain times.
Existing shareholders might experience dilution of their shares, which can be like watching a slice of their pie get smaller. It’s a trade-off that comes with trying to raise funds.
A Down Round Term Sheet is a legal document outlining the terms of a financing round where a company's valuation is lower than in previous rounds. It’s a bit like hitting a speed bump in your business journey.