Term Sheet from Village Capital
I. Introduction
This Term Sheet ("Term Sheet") outlines the proposed terms and conditions for an investment agreement between [Investor Name] ("Investor") and [Your Company Name] ("Company"). The purpose of this document is to facilitate discussions between the parties and to serve as a basis for drafting the final investment agreement. This Term Sheet is not legally binding except for the provisions specifically indicated as such.
II. Investment Details
Investment Amount: The Investor agrees to provide an investment of [Investment Amount] in [Currency] to the Company in exchange for [Percentage]% equity ownership.
Valuation: The pre-money valuation of the Company is set at [Pre-money Valuation], leading to a post-money valuation of [Post-money Valuation] after the investment.
Investment Structure: The investment will be made in [Single/Multiple] tranches, subject to mutually agreed milestones and performance metrics.
Use of Funds: The investment proceeds will be primarily used for [Key Purposes], including but not limited to product development, marketing, and team expansion.
III. Rights and Obligations
Board Representation: The Investor shall have the right to appoint [Number] board member(s) to the Company's board of directors.
Protective Provisions: The Investor shall have customary protective provisions, including but not limited to:
Approval rights for certain corporate actions.
Participation rights in future financing rounds.
Information rights to access Company financials and operational updates.
Liquidation Preference: The Investor shall have a [Participation/Non-participation] liquidation preference, entitling them to receive [Multiple] times their initial investment before other distributions are made to shareholders.
Anti-dilution Protection: The Investor shall have anti-dilution protection in the event of future down-round financings, ensuring their ownership percentage is maintained.
IV. Exit Strategy
The parties shall mutually agree upon an exit strategy, which may include options such as acquisition, initial public offering (IPO), or other liquidity events. In the event of a potential exit, the Investor shall have the right to participate in discussions and negotiations to maximize shareholder value.
V. Miscellaneous
A. Confidentiality
Both parties agree to maintain the confidentiality of all information shared during negotiations and subsequent discussions.
B. Governing Law:
This Term Sheet shall be governed by and construed by the laws of the [State/Country], without regard to its conflict of laws principles.
C. Expenses:
Each party shall bear their own legal and other expenses incurred in connection with the negotiation and execution of the final investment agreement.
VI. Execution
This Term Sheet may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute the same instrument. By signing below, the parties acknowledge their agreement to the terms and conditions outlined herein.
[YOUR COMPANY NAME] (Company)
[DATE SIGNED]
[INVESTOR NAME] (Investor)
[DATE SIGNED]
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