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[COMPANY]
Term Sheet
Series A Preferred Stock Offering
_____________, 20__
| Company: | [Company], a [Delaware] corporation. |
|---|---|
| Type of Security: | Series A Convertible Preferred Stock |
| 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 |
| Minimum Investment: | $________ (may be waived by the Company in its sole discretion) |
| Shares Authorized To Be Sold in This Offering: | ________ |
| Liquidation Preference: | On a liquidation of the Company, the Series A Preferred will be entitled to a return of their purchase price per share, and the remainder of the proceeds will be paid to the common shareholders (a 1x liquidation preference; non-participating preferred) |
| Anti-Dilution: | Standard, broad-based weighted average anti-dilution protection; customary carve-outs for stock options and other board-approved equity issuances other than for capital raising |
| Dividends: | Non-cumulative; when, as and if declared by the board |
| Voting Rights: | Series A Preferred will vote on an as-converted-to-common-stock basis and not as a separate class. Consent of holders of a majority of the Series A Preferred is required to amend or alter the rights, preferences and privileges of the Series A Preferred Stock |
| Conversion: | The Series A Preferred will be convertible into common stock on a 1:1 basis (unless the conversion ratio is adjusted as a result of an anti-dilution adjustment, or in the event of a stock split, etc.). Mandatory conversion in the event of (i) an IPO or (ii) upon the written consent of holders of a majority of the Series A |
| 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 Stock Purchase Agreement, which will include a right of first refusal in favor of the Company on the Series A Stock purchased by the investor |
Capitalization
(as of ________, 20__, as adjusted for maximum Series A Offering)
| No. of Shares | % on Fully-Diluted Basis | |
|---|---|---|
| Issued and outstanding Common Shares: | ________ | ________% |
| Stock option pool to be reserved: | ________ | ________% |
| Series A 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.