Financing Term Sheet
I. Introduction
This Financing Term Sheet ("Term Sheet") outlines the key terms and conditions for a potential financing agreement between [Your Company Name] ("Company") and [Investor Name] ("Investor"). This Term Sheet serves as a preliminary agreement that sets the groundwork for more detailed negotiations and the eventual drafting of a formal financing agreement. The terms and conditions outlined herein are subject to further discussion and agreement between the Company and the Investor.
II. Parties Involved
[Your Company Name] (Company): A leading software development company specializing in creating innovative solutions for businesses across various industries, including fintech, healthcare, and e-commerce
[Investor Name] (Investor): prominent venture capital firm known for investing in early-stage technology startups with high growth potential. They have a portfolio of successful companies in the tech sector and a track record of strategic investments.
III. Investment Details
Investment Amount: $5,000,000
Investment Type: Equity Investment
Valuation: The pre-money valuation of the Company is set at $20,000,000.
Ownership Percentage: The Investor will receive 25% ownership in the Company post-investment.
IV. Key Terms and Conditions
Use of Funds: The investment proceeds will be used for strategic purposes:
Product Development
Marketing
Expansion
Operational Improvements
Investment Timeline: The Investor agrees to provide the investment amount in two tranches, with the first tranche of $3,000,000 to be provided upon signing this Term Sheet, and the second tranche of $2,000,000 to be disbursed within six months of the initial investment.
Board Representation: The Investor will have the right to appoint one member to the Company's Board of Directors, who will actively participate in strategic decision-making and provide valuable insights and guidance.
Anti-Dilution Protection: The Investor shall be entitled to anti-dilution protection in the event of subsequent equity rounds at a lower valuation, ensuring that their ownership stake is protected from dilution.
Exit Strategy: The parties will discuss and agree upon an exit strategy, which may include options such as acquisition by a strategic partner, initial public offering (IPO), or other liquidity events that maximize value for both the Company and the Investor.
V. Legal and Miscellaneous
Confidentiality: Both parties agree to maintain the confidentiality of all information shared during negotiations and the execution of this Term Sheet.
Governing Law: This Term Sheet shall be governed by and construed in accordance with the laws of [Jurisdiction].
Exclusivity: The Company agrees to grant the Investor exclusivity for 45 days to conduct due diligence and finalize the investment agreement.
Expenses: Each party will bear its expenses incurred in connection with this transaction unless otherwise agreed in writing.
VI. Signatures
This Term Sheet is subject to the execution and delivery of a formal financing agreement between the parties. The undersigned hereby agree to the terms and conditions set forth above:
[Your Name]
[Your Title]
[Date]
[Investor Name]
[Investor Title]
[Date]
Term Sheet Templates @ Template.net
