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.
Investors should look closely at the company's plan moving forward, assess risks, and see if the potential for recovery outweighs the downsides.
To succeed in a down round, companies should clearly communicate their vision, address any past issues, and demonstrate how new investments will turn things around.
A solid term sheet should cover things like valuation, amount of investment, investor rights, and any special conditions, just to name a few.
While not every day, down rounds can happen anywhere, including North Las Vegas, especially in tough economic times.
For existing investors, a down round can be a bitter pill to swallow, as it often dilutes their ownership in the company.
Sometimes, companies hit rough patches, and a down round helps them raise needed capital to keep the lights on and continue operations.
A Down Round Term Sheet is basically a legal document outlining the terms of a financing round where a company's valuation has dropped compared to previous rounds.