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Angel investors: Individuals investing their own capital, experience, and time in early-stage companies. They personally choose their investments, instead of giving their money to a venture capital fund where money is invested on their behalf.
How to Prepare a Term Sheet Identify the Purpose of the Term Sheet Agreements. Briefly Summarize the Terms and Conditions. List the Offering Terms. Include Dividends, Liquidation Preference, and Provisions. Identify the Participation Rights. Create a Board of Directors. End with the Voting Agreement and Other Matters.
Deal documents including debenture agreements and share certificates. Investor reports from portfolio companies or companies you follow closely as a non-investor. Option agreements, restricted stock grants, warrant grants. 1099-DIV and 1099-INT notifications regarding dividends or interest payments.
But no matter who the investor is, a term sheet will always contain six key components, including: A valuation. An estimate of what a company is worth as an investment opportunity. Securities being issued. Board rights. Investor protections. Dealing with shares. Miscellaneous provisions.
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