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.
For sure! If managed well, it can lead to a sharper focus on the core business and a chance to get back on track. Sometimes, a little setback can be the push needed for a big comeback.
Definitely! A down round can raise red flags for future investors. It can make it seem like the company is struggling, which could make them think twice before investing.
Existing investors might feel a pinch since their shares could be worth less. It's a tough pill to swallow when the company they believed in is raising funds at a lower valuation.
Keep your eyes peeled for things like dilution of your ownership, changes in control, and any tricky conditions that might come back to bite you later on.
A Down Round Term Sheet is a document that outlines the terms when a startup raises capital at a lower valuation than previous rounds. It's kind of like taking a step back before moving forward.