Demystifying Term Sheets

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As an entrepreneur, when I got my first term sheet, I was totally mystified -- there are a lot of terms and language I needed to understand in order to make a decision about whether to agree to the deal. So, the goal of this conversation is to demystify the process and language of term sheets.

This session includes an IEEE attorney to help explain terms and a recovering VC, currently in Private Equity, who is also a Board Chair at his son’s new start-up seeking VC funding.

Our discussion focuses on some of the following questions.

  • What is the process that precludes sending an entrepreneur a term sheet?
  • How much of the deal is agreed upon before the term sheet is sent – if any?
  • How are the number of shares and share price determined?
  • What is pre-money vs post-money?
  • What are warrants and conversions?
  • What does the dividends section at x percent mean? Is it ever enforced?
  • What are the most important items on the term sheet to pay attention to?
  • Which items can be negotiated and which ones are deal-breakers?

The goal of the Demystifying Series is to provide real-world knowledge and advice from those who have both knowledge and experience on the topic. Each conversation aims to offer valuable insight to entrepreneurial start-ups and to dispel general misconceptions.

As an entrepreneur, when I got my first term sheet, I was totally mystified -- there are a lot of terms and language I needed to understand in order to make a decision about whether to agree to the deal. So, the goal of this conversation is to demystify the process and language of term sheets.

This session includes an IEEE attorney to help explain terms and a recovering VC, currently in Private Equity, who is also a Board Chair at his son’s new start-up seeking VC funding.

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