Keep Term Sheets Simple for Quicker Cash to Spend

Gust

Remember a term sheet agreement is not a deal until the check clears. It’s true that angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. Anti-dilution protection.

Keep Term Sheets Simple for Quicker Cash to Spend

Startup Professionals Musings

Remember a term sheet agreement is not a deal until the check clears. It’s true that Angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. Anti-dilution protection.

A Primer on Angel Investment ‘Simple Term Sheets’

Startup Professionals Musings

Remember a term sheet agreement is not a deal until the check clears. It’s true that angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. Anti-dilution protection.

That convert you raised last year is a part of your cap table

Seth Levine's VC Adventure

When it comes to convertible debt, I’ve had a few instances recently where “out of sight, out of mind” has created some misunderstandings around deal structures. But factor in that convertible debt above and you’re actually taking more like 50% dilution from the ownership reflected on your pre-convert cap table. Not necessarily a bad deal, but if you didn’t have that in your head you’re setting yourself up for a big surprise.

That convert you raised last year is a part of your cap table

Seth Levine's VC Adventure

When it comes to convertible debt, I’ve had a few instances recently where “out of sight, out of mind” has created some misunderstandings around deal structures. But factor in that convertible debt above and you’re actually taking more like 50% dilution from the ownership reflected on your pre-convert cap table. Not necessarily a bad deal, but if you didn’t have that in your head you’re setting yourself up for a big surprise.

The downside of high valuations

StartupCFO

When it comes to deal structuring, the higher you push the valuation, the more “protections&# investors will build in. This can be dilutive depending on how long the shares are out there. Ratchets : It is standard to have what is known as a weighted average anti dilution protection. 53% of deals had participating prefs. And if your deals have lots of protections built in, then you need those high exits if you, as founders, are going to hit the jackpot.

allensblog: "Fully-Diluted"

Allen's Blog

Fully-Diluted". In a deal recently, the term sheet offered by the prospective investor contained a reference to the term: "fully-diluted" The company accepted the term sheet and the lawyers drafted the documents. On review by the Company, however, it became clear that the parties had different interpretations of "fully-diluted" Due to some idiosyncracies of the company's capital structure, the disagreement had a significant impact on the deal structure.

10 Tips for Startups Raising Money from Angels

VC Cafe

Deal structure – I could write a full post just on this, but some aspects that were brought up are the need to agree on a reasonable valuation, what investment vehicles are used (convertible debt vs stock, options and warrants and other non-dilutive mechanisms).

Include Deal Terms or Not?

Mark Birch

I had a discussion the other night with an entrepreneur about whether to include specific deal terms in the pitch deck or investor meetings. There are seven main points to consider when talking about the structure of the deal: Raise – The amount of capital you are raising.

Startup Blog: 7 Questions You May Get from Potential Investors

Taffy Williams

This can happen based on a great deal with a partner, positive data from proof-of-concept, a major advancement in development, or other such value creating events. If you are dealing with a lead investor, they usually go by the “golden rule; I got the gold I set the rules.&#

Should You Co-Found Your Company With a Software Development Shop (2 of 2)?

David Teten

I’ve been looking for suggestions for an initial deal structure that is appropriate for the theoretical case of a trusted dev shop putting in $100k in market-value of services over a 6 month period in time. That said, I’m not sure of the most appropriate structure.

Goldman Sachs / SEC: political witch-hunting is no way to change a market

Fred Destin

Reading the allegations against Goldman Sachs and Fabrice Tourre in the case of structured CDO scandal (aka Abacus), I am reminded of Spitzer and how a General Attorney used a witch-hunt as a political tool, only to be later exposed himself in the company of barely clad ladies.

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