How to negotiate a term sheet

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How to negotiate a term sheet. An event organized by Startupbootcamp, presented by Patrick de Zeeuw (Startupbootcamp) and Dave Dirks (Certa Legal).

Published in: Economy & Finance, Business
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How to negotiate a term sheet

  1. 1. About MeCo Founder Startupbootcamp GlobalAuthor I’m Hungry, 100 basics to startup & accelerate a company
  2. 2. Global Startup Ecosystem
  3. 3. 70 teams accelerated since 2010
  4. 4. What’s a program like?3 months Acceleration | 3 months Funding18 months Alumni Growth Program
  5. 5. “SBC is NOT an incubator, its a well-oiled, full of gas,speed racing car, taking you from 0 to 200 km/h,not in 3 months, but in just a week.”
  6. 6. “SBC has a very large network of experts,mentors and investors who are more than willingto help in any way they can.”
  7. 7. Why we do this?Giving back | Create & activate startup ecosystems
  8. 8. pdz@startupbootcamp.org Patrickdezeeuw@patrickdezeeuw | @imhungry100+31 681429654 #SBCAmsterdamQuestions?
  9. 9. Dave DirksManaging Partner Certa LegalM&A & VC lawyerCo-Founder NTSU Fund I B.V.Shareholder StartupbootcampAdvisory board member / mentor@dave_dirks dirks@certalegal.nlTSF Tech Startups Funding
  10. 10. The Players
  11. 11. The Players• The Entrepreneur• The Venture Capitalist• The Angel Investor• The Syndicate• The Lawyer• The Mentor(Brad Feld, Jason Mendelson, Venture Deals, Be smarter than your lawyer and Venture Capitalist)
  12. 12. How to raise money
  13. 13. How to raise moneyDo or do not, don’t tryDetermine how much you are raisingFund-raising materialsFind your right investor(s)Closing the dealUnderstand it is about: Economics, ControlFinancing rounds: seed, series a, series b, etc.
  14. 14. Economics (I)Price– Valuation• Premoney / postmoney• Fully diluted• (Warrants)Liquidation preference– From 1x to 10x to 1x– Investor participation (full, capped, none)– Liquidation event definitionPay to play, pay or dilute
  15. 15. Economics (II)VestingIndustry standard:– 4 years (1 year + 36 months); 1 year cliffSingle trigger vs. double triggeraccelerationEmployee poolAnti – dilution:– (full ratchet, broad-based, narrow-based weightedaverage) (carve-outs)Good / bad leaver
  16. 16. Board of Directors– Official member– ObserverProtective provisions– Veto rights / Qualified majority, for major board andshareholders decisions (list or annex)Drag along (investor / founders & investor jointly)Conversion (liq pref / control)Control
  17. 17. Other

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