Both Sides of the Table

JULY 29, 2010

We received so much positive feedback from our This Week in Venture Capital show walking through valuation calculations & term sheets that we decided to do a Q&A show this week to address topics that entrepreneurs want to learn about. Q: “If you have a term sheet on the table how should you leverage with other VCs?&#

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Venture Capital Term Sheet Valuation Stock Options 282

Berkonomics

MAY 15, 2014

A good example was during the negotiation of a term sheet. These usually involve a handful of angel investors, and a few entrepreneurs, who all want to build the very best term sheet for their exciting nascent enterprise. It was not until the later 1980s that the preferred share structure became popular. Raising money'

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Term Sheet Angel Groups Angel Investor Deal Structure 91

YoungUpstarts

FEBRUARY 6, 2017

As an entrepreneur, your goal when raising financing is to get several term sheets — the documents describing the terms and conditions of financing. If you end up with more investor demand than you can handle, you can always raise a larger amount of money. ’ Don’t give the appearance of hedging your bets!

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Venture Capital Term Sheet Technical Review Due Diligence 100

David Teten

AUGUST 19, 2019

In many cases, we will provide fully committed accordion lines that allow companies to borrow additional funds upon demand, when certain topline revenue goals are achieved, and/or burn down their credit card rates when these milestones are achieved.”. Venture debt investors , who typically use a structure like this sample term sheet teardown.

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Revenue Term Sheet Founder Technical Review 60

The Next Web

APRIL 6, 2013

The five suggestions below are designed to help facilitate the investment process which may lead to a more expeditious term sheet and teach entrepreneurs to think more like an investor. Yet this is the time when you will be most in demand by investors. Go For The Money NOW. Seek funding precisely when you don’t need it.

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Term Sheet Due Diligence Strategic Investors Valuation 126

David Teten

JANUARY 19, 2021

From RBI, Flexible VCs borrow the ability to reap meaningful returns without demanding founders build for an exit. Santa Clara University shares their demand dividend structure. . Womble Bond Dickinson has released a white paper on Performance Aligned Stock and a term sheet on ImpactTerms.org. . (If Emily Campbell, Esq.

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Cofounder Technical Review Equity Dividend 78

Both Sides of the Table

MAY 21, 2018

I told him, “I know we don’t yet have a term sheet so you feel you need to listen to everybody’s request. But imagine you were expecting two term sheets imminently. If you don’t act in demand, people will subconsciously know you’re not in demand. How would you act then? It’s human nature?—?

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Term Sheet Later Stage Demand Email 217

View from Seed

FEBRUARY 23, 2016

Once their mission and curation principles were in place, they can move faster and keep up with the daily demands to ship the newsletter without getting stuck debating what to include. Featured posts in CrunchBase Daily , StrictlyVC , and Dan Primack’s Term Sheet
. Second, Create a Content Discovery Process. Nuzzel.com
.

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Curation RSS Term Sheet Technical Review 120

Both Sides of the Table

MAY 13, 2018

If an investor isn’t engaging then they’re not suddenly going to get a term sheet. People who believe the former believe that you should see the market demand before too many people know you’re “in market.” You can short-hand this as “engagement.” I think there’s some truth in this. This is the exception, rather than the rule.

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Term Sheet Due Diligence Campaign Sales 332

The Next Web

SEPTEMBER 13, 2013

The term sheets tend to be fairly standardized and straightforward as well. Term sheets are littered with many more obscure protective provisions and onerous terms. This is driven both by supply and demand. From there, you typically get the thumbs up or down within a day or two.

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Asia Silicon Valley India Term Sheet 132

YoungUpstarts

OCTOBER 28, 2015

Investors typically negotiate from a term sheet, which if not handled properly can create problems that can hurt or kill the startup’s chances when they do their Series A round of funding. Entrepreneurs need to hit a happy medium with backers, not giving away too much but not making overly aggressive demands.

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Convertible Security IP Technical Review Software Review 100

crowdSPRING Blog

JUNE 6, 2013

A founder-friendly term sheet – [link]. Being Digital Demands You Be More Human | HBR – [link]. But sadly, just many puppies – [link]. Four Things To Consider If You Want To Scale Your Startup | Forbes – [link]. Sales Leads On A Small Budget – [link].

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Social Media Small Business Design Media 95

ReadWriteStart

JUNE 1, 2020

In very few specific cases, depending on the nature of the business, the business model might demand a considerable gestation period or extensive research and development. It is essential to understand the funding structure stated in your term sheet and the advantages and disadvantages it may have for your business.

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Startup Entrepreneur Elevator Pitch Seed Stage 150

Startup Company Lawyer

MARCH 14, 2010

Founders Institute Plain Preferred Term Sheet (by WSGR – disclaimer, I represent the Founders Institute and was involved in drafting this document). This post assumes that you have a basic understanding of Series A financing terms. Y Combinator Series AA Equity Financing Documents (by WSGR). Dividend preference.

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Finance Software Review Term Sheet Liquidation Preference 70

Steve Blank

APRIL 9, 2009

To do that we will create end-user demand and drive it into the sales channel, educate the channel and customers about why our products are superior, and help Engineering understand customer needs and desires. We will accomplish this through demand-creation activities (advertising, PR, tradeshows, seminars, web sites, etc.),

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Silicon Valley Technical Review RSS PR 259

Both Sides of the Table

OCTOBER 7, 2014

Entrepreneurs started demanding that VCs call their first-round financings “seed” rounds even if they were $3 million. I had very smart entrepreneurs where I gave the company $2-3 million and we raised anywhere between $3-5 million and when I put A-round in the term sheet they had their lawyers change it back to seed rounds.

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Cap Table Silicon Valley Term Sheet Finance 399

Startup Company Lawyer

AUGUST 31, 2012

At the maturity date, there is a risk that investors may demand repayment. Form of Convertible Security Term Sheet. The risk that an investor might demand repayment of a convertible note is eliminated with the convertible security. These documents are available at the links below. Form of Convertible Security.

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Convertible Security Equity Security Preferred Stock 73

Hippoland

MARCH 5, 2017

Once you get terms — either verbal or bulleted in email — then tell all VCs that you are now talking specific terms with another VC and that you’re trying to figure out who is potentially in this round and who is out. Just getting any term sheet at all is a GREAT starting point.

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Term Sheet Valuation Later Stage Aggregator 48

The Next Web

FEBRUARY 27, 2014

Supply and demand. To start, let’s not forget about the obvious: the natural economic principles of supply and demand apply to valuing your business. your equity in a hot new patented technology business), the higher the demand (e.g., your equity in a hot new patented technology business), the higher the demand (e.g.,

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Valuation Forecast Seed Stage .Net 167

View from Seed

AUGUST 12, 2015

The early traction may be interesting, but investors fear that demand is driven by a relatively small niche with idiosyncratic tastes or needs. In particular, he asked one very clever question of VCs to run a smoother, more effective process, culminating in four term sheets from interested, lead investors.

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Seed Stage Marketing Angel Investor Term Sheet 120

View from Seed

AUGUST 12, 2015

The early traction may be interesting, but investors fear that demand is driven by a relatively small niche with idiosyncratic tastes or needs. In particular, he asked one very clever question of VCs to run a smoother, more effective process, culminating in four term sheets from interested, lead investors.

Seed Stage 120

Seed Stage Marketing Angel Investor Term Sheet 120

Gust

OCTOBER 12, 2011

Last week , we took the plunge and began dissecting an example term sheet for a convertible debt financing round piece by piece. I’ll continue with more specific terms and wrap up next week with some thoughts about recent changes and trends for the future.

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Finance Term Sheet Pre-Money Valuation Early Stage 107

This is going to be BIG.

OCTOBER 3, 2017

That's why, out of the 2,000 opportunities I saw this year, you and your company are one of the 8-10 I gave a term sheet to. Really, the biggest determinant of price is supply and demand--and so, more so than a qualitative judgement on your worth as a human being, consider this bid a data point. So, congrats!

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Venture Capital Dilution Term Sheet Lead Investor 71

Gust

OCTOBER 21, 2011

Readers joining this series in progress may find it helpful to download the sample term sheet from my firm’s website and review the earlier posts covering the basics. a) payable upon demand as of the closing of such transaction; or.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Feld Thoughts

SEPTEMBER 30, 2015

The demand for the 3D Robotics Solo drone is off the charts. We are issuing a term sheet today to another company that I hope accepts our offer. Accenture just launched their Connected Analytics Experience’s immersive environment which is enabled by Mezzanine. Rock Band 4 comes out next week. Enough said.

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Mezzanine Product Term Sheet Analytics 70

Rob Go

AUGUST 29, 2016

Most term sheets talked about the valuation in these terms, and you added the dollars invested to get a post-money valuation. Today, nearly all early stage term sheets I see are expressed as post-money valuations. Overall, I think this move towards post money valuations in term sheets is a good thing.

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Post-Money Valuation Valuation Cap Table Term Sheet 52

The Startup Lawyer

JUNE 9, 2010

The term sheet was pretty much a done deal, when the startup’s CEO demanded a salary of $25,000. The startup community focuses most of the term sheet discussion on liquidation preferences and anti-dilution , but startup CEO salary is nonetheless an important issue. The Importance of Startup CEO Salary.

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Salary Term Sheet Liquidation Preference Liquidity Event 99

Both Sides of the Table

APRIL 3, 2010

We used the Y Combinator open source term sheet. We signed the term sheet within 48 hours and had funded in under 2 weeks. They were grateful for the extra money as their launch was overwhelmingly successful and they had to rapidly hire staff to support customer demand. If you accept my terms you’re done.

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Venture Capital Term Sheet Early Stage Silicon Valley 265

This is going to be BIG.

OCTOBER 10, 2014

That also includes 16 Brooklyn Bridge Ventures deals done and five agreed to term sheets. That also means that the best way you can move your price up is to create demand for your round. That includes all the deals I did at First Round, with the exception of Refinery29 , which was a Series A.

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Pre-Money Valuation Dilution Valuation Term Sheet 146

Professor VC

JULY 25, 2013

An entrepreneur received two Series A term sheets, one lead by an international investor and the other from SH. The seed round had participation from two venture firms that were committed to doing their pro-rata and seed round was done with a very clean term sheet (1x preference, non participating, no anti-dilution).

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Term Sheet Silicon Valley Syndicate Syndication 46

www.xconomy.com

JUNE 9, 2012

By the same token, Coats could find no correlation between the hot deals (where investor demand was highest) and the hot outcomes. Xconomy on Demand. At the time, he had been reviewing the outcomes of his previous venture investments, and found “some of my best deals were the ones that I had had trouble raising funds.” Dont despair….

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San Diego Venture Capital Technical Review San Francisco 40

Feld Thoughts

FEBRUARY 15, 2016

Brad was (and is) resolute in his belief that creating outsized returns in the venture industry demands ignoring the macro environment as it relates to investment pace.” When I was an entrepreneur there was no public information about how term sheets worked or how investors thought.

Silicon Valley 70

Silicon Valley Term Sheet Early Stage New York 70

Rob Go

FEBRUARY 3, 2014

You want to be able to say “they are in, assuming reasonable terms. Find a lead investor: These are funds that are willing to stick their neck out and be the first “yes” and issue a term sheet. When you get a term sheet, you can do some work to optimize the deal. Feel free to call them”. Some thoughts.

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Term Sheet Due Diligence Valuation Seed Stage 73

Steve Blank

JANUARY 4, 2010

Staring at us in the board meeting were three term-sheets from brand name VC’s and an unexpected buy-out offer from Google. A scalable startup typically requires external “risk&# capital to create market demand and scale. In fact, Google’s offer for $15 Million was equal to the highest valuation from the venture firms.

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Hockey Stick Venture Capital Startup Cofounder 276

Feld Thoughts

JUNE 2, 2015

But, I’ve seen some angels ask for it (or even demand it), especially when there is ambiguity around this and the round happens much higher than the cap. The entity getting screwed on this term are the founders, who now have a greater liquidation preference hanging over their heads than the dollars invested by the angels.

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Liquidation Preference Cap Table Angel Investor Post-Money Valuation 70

Gust

OCTOBER 8, 2014

Entrepreneurs started demanding that VCs call their first-round financings “seed” rounds even if they were $3 million. I had very smart entrepreneurs where I gave the company $2-3 million and we raised anywhere between $3-5 million and when I put A-round in the term sheet they had their lawyers change it back to seed rounds.

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Cap Table Silicon Valley Term Sheet Non-Compete 136

ithacaVC

NOVEMBER 28, 2012

I was a little surprised that his list did not include the following: Demand for your deal, measured by the number of term sheets you have obtained. Assess the number of direct competitors and barriers to entry. Find “comparables” who have received financing (market approach).

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Valuation Intellectual Property Startup Early Stage 69