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Term Sheet Series Wrap Up
Jason and I hope you enjoyed reading our term sheet series at least as much as we enjoyed writing it. While we won’t be competing with our friend Jack Bauer for any drama awards (I tried to make it 24 posts, but could only get to 20), we’ve tried to take a balanced and pragmatic approach to explaining the mysterious “VC term sheet.” Remember – we’re not lawyers (ok – Jason is) and this isn’t legal advice so you should not rely on it for anything, yada yada standard disclaimers follow. In other words, use at your own risk.
For ease of reference, following are the various sections (linked to their corresponding post) that we covered.
- Price
- Liquidation Preference
- Board of Directors
- Protective Provisions
- Drag Along
- Anti-Dilution
- Pay-to-Play
- Dividends
- Redemption Rights
- Conversion
- Conditions Precedent to Financing
- Vesting
- Information Rights
- Registration Rights
- Right of First Refusal
- Voting Rights
- Employee Pool
- Restriction on Sales
- Proprietary Information and Inventions Agreement
- Co-Sale Agreement
- Founders Activities
- Initial Public Offering Shares Purchase
- No Shop Agreement (also Unilateral or Serial Monogamy)
- Indemnification
- Assignment
If you have any questions, comments, or suggestions for things we missed, email me anytime. We have had numerous requests for republishing this content – if you are interested, please contact me. We’re usually happy to oblige – we just want to make sure we know about it. Until next season …
Brad,
This term sheet series is a great example of how blogs can really work and add value for all. No doubt the series will change the lives of all entrepreneurs who read it. I just wish that this kind of information was available when I was in business school and when I did my first venture. Just another example of real value from what blogs are all about that needs to be recognized. Kudos.
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Terms of endearment
For the better part of the year, Brad Feld, Managing Director at Mobius Venture Capital and general counsel Jason Mendelson have been working up their guide to Term Sheets – the contract between entrepreneurs/businesses and professional investors. As o…
Can anybody help. I am currently advising a company to conduct a phased acquisition in a target. The first round of equity purchase is happening through new money being put in. Subsequently, the shares of the existing promoter are brought out and my client owns 100%.
Can somebody help me with a typical term sheet to help me document appropriately
Is a term sheet with a lender, signed by both parties, a binding document?
Very rarely. Most of the time the term sheet explicitly says that it is NOT binding.
[...] From VCs Brad Feld & Jason Mendelson – Term Sheet Series Wrap Up Guy Kawasaki – The Top Ten (Sixteen) Lies of Lawyers Mark Suster – How to Work with [...]
[...] Feld & Jason Mendelson - Term Sheet Series Wrap Up Guy Kawasaki - The Top Ten (Sixteen) Lies of Lawyers Mark Suster - How to Work with Lawyers at a [...]
[...] Here is a list of some of the most common terms that are worthy of negotiation. This is not intended to be an exhaustive list of all term sheet provisions – there are many great resources on the web describing in detail the various term sheet provisions (for example, Brad Feld’s term sheet series). [...]
Hey Jason and Brad,
What a great way to get an MBA in Investing. And, though this was posted close to 5 years ago, it's as relevant today as it was then. It's going to be very helpful for the coming project negotiations. Thanks for this.
Richard http://pointnexus.ca
P.S. We'll be in touch.
[...] to Term Sheets: 1. Brad Feld's Term Sheet series 2. Venture Hacks' Term Sheet [...]
[...] to Term Sheets: 1. Brad Feld's Term Sheet series 2. Venture Hacks' Term Sheet [...]
[...] to Term Sheets: 1. Brad Feld's Term Sheet series 2. Venture Hacks' Term Sheet [...]
[...] to Term Sheets: 1. Brad Feld’s Term Sheet series 2. Venture Hacks’ Term Sheet Hacks Weinberg also points to links to sample documents (such [...]
[...] to Term Sheets: 1. Brad Feld’s Term Sheet series 2. Venture Hacks’ Term Sheet [...]