Gust

AUGUST 6, 2014

In all cases, the one fundamental requirement is that the company and the investor agree on how much is being invested, and on what terms. These items are included in what is known as a term sheet. What the terms end up being, and how a company and the investor(s) arrive at that term sheet, can differ widely.

Term Sheet 170

Term Sheet Lead Investor Preferred Stock Common Stock 170

Hippoland

AUGUST 9, 2016

One question that seed investors love to ask is if you have a lead investor in your seed round. But once you figure out why an investor is asking, tactically speaking, what do you do? Let’s say that you find out that an investor is asking because he/she does not invest without a lead investor in place.

Lead Investor 48

Lead Investor Term Sheet Due Diligence Convertible Security 48

View from Seed

FEBRUARY 12, 2020

Most investors have a process that takes a certain amount of time, but can get all hands on deck and cut that timeline in half or more if they know that they have to make a decision quickly. If you don’t have a term sheet, my general approach is to communicate that you are early in the process.

Term Sheet 364

Term Sheet Burn Rate Founder Partner 364

Gust

NOVEMBER 16, 2013

But because the single biggest problem with early-stage funding is ‘getting the first pickle out of the jar’ (that is, getting someone to provide a term sheet and make the first commitment), in recent years an interesting alternative to this has arisen. original post can be found on Quora @ [link] *.

Lead Investor 150

Lead Investor Term Sheet Early Stage Angel Groups 150

View from Seed

FEBRUARY 23, 2021

For early stage VC ‘s, Syndication is the process of sharing investments with other potential co-investors. The classic scenario is when a VC has a signed term sheet to lead a round, but has left room open for another meaningful investor.

Syndicate 207

Syndicate Syndication Term Sheet Cofounder 207

Austin Startup

APRIL 1, 2017

out of state VCs Don’t rush a term sheet In assessing financing terms and interacting with their lead investors, most founders instinctively focus on two core things: economics and control. Do not take that selection lightly. Background Reading: How to avoid “captive” company counsel Local v.

Term Sheet 48

Term Sheet Institutional Investors Technical Review Lead Investor 48

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. If we feel a mutual connection then my goal is to make your life easier by offering you a term sheet before you’re even raising and I’ll spend the time and effort trying to prove that it isn’t worth running a process.

Term Sheet 332

Term Sheet Due Diligence Campaign Sales 332

Rob Go

SEPTEMBER 4, 2018

Lead investors are few. Leads that are true force-multipliers are exceedingly rare. Although seed funding has exploded since we started Nextview, we continue to hear the refrain from founders that there are tons of investors that will pile-in on a round that is coming together, but that lead investors are few and far between.

North America 36

North America Seed Stage Early Stage Lead Investor 36

Gust

SEPTEMBER 27, 2014

As such, your public profile should include everything non-confidential about your business that may attract the interest of potential investors, and your private profile should contain complete, accurate information about all the details of the business that will lead investors to request an in-person meeting with you.

Angel Groups 159

Angel Groups Elevator Pitch Software Review Deal Flow 159

Scott Edward Walker

JUNE 9, 2019

Over the past few weeks, two of my clients have received financing term sheets in which the investors requested super pro rata rights. In addition, should any [Major] Investor choose not to purchase its full pro rata share, the remaining [Major] Investors shall have the right to purchase the remaining pro rata shares. .”

Preferred Stock 56

Preferred Stock Term Sheet Dilution Stock 56

Both Sides of the Table

JUNE 5, 2015

Another problem that arises in financings these days is that after a VC submits a $2 million term sheet all of a sudden a large number of “helpful investors” pop up who were waiting for a “strong lead” and now all of a sudden a $2 million round becomes a $2.75m round. For me it’s clear.

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

View from Seed

OCTOBER 22, 2015

Here’s a quick look at the graphic as published in David’s article (click to view a larger version): In some cases, these steps are blurred or shuffled slightly in terms of sequence, but broadly speaking, most VC firm processes look basically like this. Work on securing a lead investor who can then help in forming a syndicate.

Term Sheet 120

Term Sheet Due Diligence Seed Stage Seed Capital 120

The Startup Toolkit

NOVEMBER 4, 2011

You’re facing two term sheets and have boiled them down to the most relevant facts, listed below. The financials immediately jump out when we talk about term sheets: what’s the valuation? Next, we check that we’re safe from any particularly onerous terms like participation preferred. 1.25mm total.

Term Sheet 31

Term Sheet Dilution Participating Preferred B2C 31

www.seriesseed.com

DECEMBER 9, 2012

Redline - Series Seed Term Sheet (1 v. Series Seed Term Sheet (v 2.0). link and Series Seed Term Sheet (v 2.0) One issue I do have with the term sheet though is the provision for $10K in investor legal expenses.   Redlines. Redline - Series Seed COI (1 v. Disclaimer.

Term Sheet 40

Term Sheet Ratchet Dilution Equity 40

ithacaVC

FEBRUARY 27, 2014

I like the practice of VCs giving term sheets that provide for a specific size for the total round and then stating how much the specific VC will contribute. At the early stage, the founding team often has lots of “interest” lined up waiting for a lead.

Term Sheet 71

Term Sheet Aggregator Lead Investor Early Stage 71

View from Seed

AUGUST 12, 2015

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. Listen to episode #8 of Traction via iTunes or SoundCloud , or get all links and context via this blog post.

Seed Stage 120

Seed Stage Marketing Angel Investor Term Sheet 120

View from Seed

AUGUST 12, 2015

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. Listen to episode #8 of Traction via iTunes or SoundCloud , or get all links and context via this blog post.

Seed Stage 120

Seed Stage Marketing Angel Investor Term Sheet 120

The Startup Toolkit

NOVEMBER 4, 2011

You’re facing two term sheets and have boiled them down to the most relevant facts, listed below. The financials immediately jump out when we talk about term sheets: what’s the valuation? Next, we check that we’re safe from any particularly onerous terms like participation preferred. 1.25mm total.

Term Sheet 20

Term Sheet Dilution Participating Preferred B2C 20

This is going to be BIG.

OCTOBER 3, 2017

I'm a lead investor. 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. Here's a piece of paper that says how much I think your dreams are worth." But, you don't feel like that as the founder. Your company is special, which, I 100% agree with.

Venture Capital 83

Venture Capital Dilution Term Sheet Lead Investor 83

Professor VC

APRIL 1, 2010

While this may certainly be the case with unsophisticated angels (much less of these now) or in cases with no lead investor, Id argue the opposite. In my experience, venture investors are more focused on percentage ownership, which obviously requires a trade-off with the amount invested and valuation. Steve Bennet. at 11:15 AM.

Term Sheet 32

Term Sheet Angel Investor San Jose Venture Capital 32

Gust

OCTOBER 26, 2011

As we conclude our convertible note financing series, there are assorted terms commonly seen in term sheets and deal documents that are worth touching on briefly. Having made it almost to the end of our sample term sheet: Documentation. Investor Questionnaire. Convertible Promissory Note(s).

Finance 79

Finance Term Sheet Covenant Accredited Investor 79

www.xconomy.com

JUNE 9, 2012

“The last thing you wanted was any more VCs like that,” says Coats, who began thinking that what lead VCs and entrepreneurs really want was additional venture investors whose participation would be less complicated—more like a co-investor—and who could decide on joining in a deal in a week or two.

San Diego 40

San Diego Venture Capital Technical Review San Francisco 40

OnlyOnce

APRIL 27, 2021

If you have a big new lead investor writing a $40mm check into a growth round, you may not have a leg to stand on. But new investors who write smaller checks as you get larger, who might only be buying a 5-10% stake in the business…there, you might have some wiggle room to negotiate.

Vesting 48

Vesting Cofounder Startup Term Sheet 48

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.

Post-Money Valuation 52

Post-Money Valuation Valuation Cap Table Term Sheet 52

Rob Go

FEBRUARY 3, 2014

This is kind of the equivalent of “I’m in as long as you have a lead” but sounds a lot better. 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. Some thoughts.

Term Sheet 73

Term Sheet Due Diligence Valuation Seed Stage 73

The Startup Lawyer

JUNE 9, 2010

Earlier this year, this issue presented itself when a client was the lead investor in a Series A round of about $2MM at a $4MM pre-money. The term sheet was pretty much a done deal, when the startup’s CEO demanded a salary of $25,000. Not all startup founders understand this tenet. Case Study.

Salary 99

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 don’t mind being the lead investor on deals that they seeded. If you accept my terms you’re done. They elected to sign my term sheet.

Venture Capital 265

Venture Capital Term Sheet Early Stage Silicon Valley 265

Business Plan Blog

DECEMBER 26, 2013

The individual is likely to be the lead investor in the venture and may join the Board of Directors. This process may include the provision of various scenarios on revenues and costs as the investors validate forecasts initially presented.

Angel Investor 51

Angel Investor Due Diligence Pre-Money Valuation Angel Groups 51

Rob Go

AUGUST 9, 2016

Think of it this way, an investor may invest in 1-3 deals a year, and build a portfolio of 7-12 active companies that they are point on at any given time. Entrepreneurs are typically only choosing one lead investor and board member per round. But often, it is not. Here are a couple suggestions on this.

Term Sheet 28

Term Sheet Due Diligence Lead Investor Portfolio 28

reidhoffman.org

NOVEMBER 12, 2013

Even though we glossed over those slides, investors knew they could come back to those slides later and dig into them if necessary. By this point in the presentation, our goal was to lead investors to believe: A network-empowered people search application could be really valuable.

Entrepreneur 111

Entrepreneur Revenue Viral Networking 111

David Teten

SEPTEMBER 6, 2015

Some corporate funds now lead rounds. Others follow independent financial lead investors and most require that independent investors be part of the syndicate. Teten: What makes for a good vs. bad corporate venture investor? They act in the interest of their portfolio companies like any investor would.

Venture Capital 60

Venture Capital Balance Sheet Technical Review Portfolio 60

ithacaVC

JANUARY 14, 2014

” To which the Series B potential lead investor says “hey, your post-money is not my problem – why should I invest at higher revenue multiples than what the industry is seeing? The best route to a high valuation is to get multiple term sheets… again obviously. ” Expect this discussion.

Pre-Money Valuation 58

Pre-Money Valuation Post-Money Valuation Valuation Term Sheet 58

Both Sides of the Table

AUGUST 1, 2010

They either do too many seed investments (for which they can spend no quality time with any) or they treat it as an option (“if you succeed come back and see us and we’ll match any term sheet you get&# ) – they view it as a sort of “right of first refusal.&#. The signaling affect is overrated.

Post-Money Valuation 298

Post-Money Valuation Term Sheet Warrant Partner 298

Rob Go

JULY 17, 2014

We want to be able to comfortably lead these rounds and speak for 1/3 – 1/2 of the capital or more. Our new fund size allows us to do that and continue to play the part of the lead investor. This leads to the second factor. In most ways however, Fund II is a carbon copy of fund I.

Seed Stage 69

Seed Stage Early Stage Due Diligence Liquidity Event 69

Austin Startup

MAY 17, 2017

At a minimum, the lead investor(s) of the round get Board seats; although they shouldn’t get Board control. Having a VC already on your seed-stage Board can make it harder to get term sheets from outsiders for your Series A. Less has been written about what startup boards tend to look like before a Series A round.

Seed Stage 48

Seed Stage Startup Cap Table Angel Investor 48

Venture Chronicles

JULY 16, 2010

The second scenario is the pulled term sheet. This is definitely on the upswing and reflects the issues that funds are having with their limited partner investors. After the term sheet is executed the investment fund will go into a deeper level of due diligence with the company, a process that is equivalent to an anal probe.

Due Diligence 28

Due Diligence Term Sheet Limited Partner LP 28

Professor VC

JANUARY 20, 2009

The funding search began the day after Labor Day and continued throughout the fall as the environment continued to worsen, and resulted in a term sheet the day before Thanksgiving. Our lead investor, Triangle Peak Partners closed on a $170 million first fund in late 2008.

Venture Capital 28

Venture Capital Silicon Valley San Jose Bootstrapping 28