Angel Investor Term Sheet
I. Introduction
This Term Sheet sets forth the key terms and conditions of a proposed investment by [YOUR NAME] ("Investor") in [YOUR COMPANY NAME] ("Company"). The purpose of this Term Sheet is to outline the primary terms of the investment and serve as a basis for negotiating the final investment documents. Please note that this Term Sheet is non-binding except as otherwise specified herein.
II. Investment Details
Investment Amount: The Investor agrees to invest $1,000,000 in the Company. The investment will be made in cash and shall be provided in full on or before July 31, 2050.
Equity Stake: In consideration of the investment, the Investor shall receive 20% of the fully diluted equity of the Company. This equity ownership will be subject to adjustment based on the final investment amount.
Valuation: The pre-money valuation of the Company for this investment is $5,000,000. This valuation was determined based on the Company's projected growth and market potential.
III. Investor Rights
Board Representation: The Investor shall have the right to appoint one director to the Company's Board of Directors. The appointed director will serve for a term of five years and will be subject to the Company's bylaws and applicable laws.
Veto Powers: The Investor shall have certain veto rights over major corporate actions, including but not limited to changes in the Company's business plan, mergers or acquisitions, and amendments to the Company's organizational documents.
IV. Key Provisions
Liquidation Preferences: In the event of a liquidation or winding-up of the Company, the Investor shall be entitled to receive 2x the original investment amount before any distribution to other equity holders.
Anti-Dilution Protection: The Investor shall be entitled to anti-dilution protection in the event of future equity issuances at a lower valuation.
V. Miscellaneous
Confidentiality: The parties agree to keep confidential the terms and existence of this Term Sheet, except as required by law or with the other party's consent.
Governing Law: This Term Sheet shall be governed by and construed in accordance with the laws of the State of California, without regard to its conflict of laws principles.
VI. Execution
This Term Sheet is not intended to create any binding obligations on the parties and shall only become effective upon execution of definitive agreements by both parties. Each party's obligations shall be subject to the negotiation, execution, and delivery of such definitive agreements.
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