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.

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.

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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.

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 means that if you issue shares later at a lower price than the shares you issued today (“down round&# ) the previous shares get repriced at somewhere between those two issue prices. Some term sheets will provide for a full ratchet, meaning that if you do a down round all shares reset to the new, lower price.

Are Investors Being Unreasonable? - Startups and angels: Along the.

Tim Keane

"  The problem has been that too-high valuations and too generous terms have spawned painful down rounds that squash the entrepreneur and his early investors.    New money, usually VC money, comes in and crams down those early investors and takes substantial shares from the entrepreneur.    Many I know will actively seek deals to work on that are run by fun, engaging people who are eager to grow the business and know what they're doing.