Example Series A Preferred Term Sheet

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Example Series A Preferred Term Sheet

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

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:β€œAccredited 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%

Example Common Stock Term Sheet

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

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