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Updated August 29, 2023You’re reading an excerpt of Angel Investing: Start to Finish, a book by Joe Wallin and Pete Baltaxe. It is the most comprehensive practical and legal guide available, written to help investors and entrepreneurs avoid making expensive mistakes. Purchase the book to support the authors and the ad-free Holloway reading experience. You get instant digital access, commentary and future updates, and a high-quality PDF download.
For your convenience, this template document is available as a Google Doc to make it easier to copy and edit. All material here is provided for illustration only; please read the disclaimer before use.
[COMPANY]
Term Sheet
Common Stock Offering
_____________, 20__
| Company: | [Company], a [Delaware] corporation. |
|---|---|
| Type of Security: | Common Stock |
| Pre-Money Valuation | $________ |
| Offering Size: | The Company intends to raise as much as $________ in this offering, although the Company may increase or decrease this amount in its sole discretion |
| Price Per Share: | $________ per share |
| Sale: | If the Company is sold before the conversion of the notes sold in the offering, holders of the notes will be entitled to be paid the greater of: (i) [3]X their note principal and accrued interest, or (ii) the amount they would have received had they converted to equity at the Valuation Cap |
| Minimum Investment: | $________ (may be waived by the Company in its sole discretion) |
| Shares Authorized To Be Sold in This Offering: | ________ |
| Dividends: | When, as and if declared by the board. The Company has not paid dividends in the past and does not currently contemplate that it will pay dividends in the future |
| Voting Rights: | All shares have the same voting rights |
| Investor Eligibility: | “Accredited Investors” only |
| Information: | The Company will provide additional information upon request |
| Closings: | One or more closings as the Company accepts subscriptions |
| Use of Proceeds: | Working capital; proceeds will be immediately available to the Company |
| Subscription Procedure: | Investors must execute a Common Stock Purchase Agreement, which will include a right of first refusal agreement in favor of the Company on any proposed transfers of Common Stock purchased in the offering |
Capitalization
(as of ________, 20__, as adjusted for maximum offering)
| No. of Shares | % on Fully-Diluted Basis | |
|---|---|---|
| Issued and outstanding Common Shares: | ________ | ________% |
| Stock option pool to be reserved: | ________ | ________% |
| Common stock to be sold in the offering: | ________ | ________% |
________ | 100% |
For your convenience, this template document is available as a Google Doc to make it easier to copy and edit. All material here is provided for illustration only; please read the disclaimer before use.
Term Sheet for a Revenue Loan
This Term Sheet is non-binding, and is meant to try to capture the parties’ intentions about the terms of a potential investment. However, neither of the parties have any obligations to one another until they enter into and sign definitive agreements.