NAVIGATING THE TERM SHEET: A GUIDE FOR FIRST TIME FOUNDERS
If your startup company has moved beyond angel financing, it means there’s a shot you’re about to start courting venture capitalists. This can be incredibly over overwhelming for many first time founders. This article attempts to prepare you for that process by explaining five of the most frequently discussed terms in venture financing term sheets. The first thing to note is that a term sheet is not a legal promise to invest. The purpose of a term sheet is to set out the major business and structural issues involved in the proposed investment. The final agreements that set out the actual terms of the investment will be negotiated later, based on the term sheet. Therefore, it’s really important that you fully understand the term sheet before signing it because it drives all of the other documents. 1. Valuation The first term that any founder will want to look at is […]
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