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Come to Terms with Angel and Venture Term Sheets


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This limited-seat luncheon brings some of Boston’s most experienced attorneys to provide two hours of deep instruction to entrepreneurs struggling to understand the complexity of high growth investments. Sample terms sheets will be provided and analyzed.

Working lunch programs are hosted by TCN’s professional service sponsors to provide tactical level information designed to accelerate the fundraising process.

Published in: Business, Economy & Finance
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Come to Terms with Angel and Venture Term Sheets

  1. 1. Term Sheet Fundamentals: A Play in Three Acts William S. Perkins, Partner Jason M. Rodriguez, Counsel
  2. 2. WHO ARE WE? Will Perkins Will Perkins concentrates his practice on general corporate matters and licensing matter, with an emphasis on strategic investments, mergers and acquisitions, structuring and financing new ventures, and public and private offerings of securities, including representation of both financial and strategic buyers. He represents both public and private companies, as well as private equity funds, in a wide range of transactions including venture capital financings; inlicensing and out-licensing transactions; product manufacturing and distribution arrangements and initial public offerings and follow-on public offerings of equity and debt securities. Jason M. Rodriguez Jason Rodriguez advises public, private and emerging companies on a broad range of corporate matters with a focus on venture capital transactions, mergers and acquisitions, joint venture transactions, licensing transactions and equity and debt financings. His work covers various industries, including telecommunications, life sciences, high technology, Internet services, broadcasting, software and publishing. He provides pro bono services to nonprofit organizations through the Lawyers Clearinghouse on Affordable Housing and Homelessness Inc. and the Boston Bar Association Business Law Pro Bono Project.
  3. 3. OUR DAY JOBS
  4. 4. WHO ARE WE TODAY? Entrepreneur........................................................Jason Rodriguez Jason, an engineer by training, spent many years in the labs of a large technology company. He is now leading a few of his former work colleagues into a new tech startup. Having spotted the growing interest in electric cars, Jason and his team have developed a product that sits between the power source (e.g., wall plug) and the charging port on the vehicle and speeds up charge times by 30%-50% (in early lab tests of a crude prototype). SpeedyCharge needs $500k-750k to develop a beta version of its product and place it with a local, electric car club, which has signed on to beta test it. Serial Angel Investor...................................................Will Perkins Will, a lawyer by training, now spends his time investing in early-stage growth companies – while appropriately still referred to as an angel, together with his group of old friends, he functions almost as an angel fund of sorts.
  5. 5. SETTING Previously... Originally introduced by email through a mutual connection, Jason and Will had a long teleconference where Jason talked will through SpeedyCharge’s pitch deck and its business model. Will expressed an interest in investing, subject to meeting in person to discuss and negotiate agreeable terms. Now... Jason and Will are meeting in person for the first time at a local craft beer hall to discuss and negotiate terms for Will’s angel investment.
  6. 6. ACT I Will and Jason meet at The Beer Hall and jump right into their negotiation. Things quickly turn to valuation... Key Terms •  •  •  •  •  •  •  •  •  •  •  LLC Corporation Founders Valuation Cap table Pre-money Post-money Convertible notes Preferred stock Priced round Conversion cap ❒ ❒ ❒ ❒ ❒ ❒ ❒ ❒ ❒ ❒ ❒
  7. 7. ACT II With valuation and structure settled, Will and Jason turn to other key terms and topics... Key Terms •  •  •  •  •  •  •  Option Pool Vesting Pre-emptive rights Blocking rights Protective provisions Board seat Observer ❒ ❒ ❒ ❒ ❒ ❒ ❒
  8. 8. ACT III Things are wrapping up... Key Terms •  •  •  •  •  Information rights Timing Drafting Counsel Expenses ❒ ❒ ❒ ❒ ❒
  9. 9. ACT IV What didn’t come up... Key Terms •  •  •  •  •  •  •  •  •  Dividends Participating preferred Anti-dilution Weighted-average Registration rights Full ratchet ROFR Co-sale Drag ❒ ❒ ❒ ❒ ❒ ❒ ❒ ❒ ❒
  10. 10. Other Resources •  The National Venture Capital Association’s “‘template’ set of model legal documents for venture capital investments” are available at: •  Series Seed documents are designed to simplify standard venture investment legal documents for seed rounds and are almost “venture-lite” documents. They are available at: •  These model documents, while instructive and prepared in some cases with helpful annotations, are no substitute for a thorough discussion/translation by your own counsel
  11. 11. Thank You and Call us! We genuinely love these topics and are always happy to brainstorm and answer questions. William S. Perkins Partner 617-951-8574 Jason M. Rodriguez Counsel 617-951-8182
  12. 12. Bingham Offices