Food and Beverage Term Sheet

I. Introduction

• This Term Sheet outlines the basic terms and conditions of the proposed investment in [Your Company Name], a startup specializing in artisanal beverages crafted from locally sourced organic ingredients.

II. Parties

1. Investor: [Name of the Venture Capital Firm], a leading venture capital firm specializing in the food and beverage sector.

2. Startup: [Your Company Name], founded by [Founders' Names], passionate entrepreneurs with extensive experience in the culinary industry.

III. Proposed Investment

• The Investor proposes to invest [Amount] in [Company Name] in exchange for [Percentage]% equity ownership, aiming to support the startup's expansion and market penetration efforts.

IV. Valuation

• The pre-money valuation of [Company Name] is determined to be [Valuation], reflecting the potential growth and market opportunity of the innovative beverage offerings.

V. Investment Terms

1. Investment Amount: [Amount], structured as a Series Seed investment.

2. Equity Stake: [Percentage]% equity ownership in the startup, ensuring alignment of interests between the Investor and the Founders.

3. Pre-money Valuation: [Valuation], based on a thorough analysis of the startup's financial performance and future projections.

4. Investment Structure: Convertible Note with a capped valuation, providing flexibility for future financing rounds.

5. Liquidation Preference: 1x non-participating preferred, ensuring downside protection for the Investor in the event of liquidation.

6. Dividend Preference: Non-cumulative, allowing the startup to reinvest profits for growth.

7. Anti-Dilution Protection: Weighted Average, safeguarding the Investor's ownership stake from dilution in subsequent financing rounds.

8. Board Representation: The Investor shall have the right to appoint one observer to the Board of Directors, facilitating strategic guidance and oversight.

VI. Milestones and Vesting

• The investment is contingent upon achieving key milestones, including product expansion into new markets and achieving target revenue growth.

• Founders' equity shall vest over four years, with a one-year cliff, incentivizing long-term commitment and alignment with the startup's success.

VII. Legal and Regulatory Compliance

• Both parties agree to comply with all applicable securities laws and regulations governing this investment agreement, ensuring transparency and regulatory compliance.

VIII. Confidentiality and Non-Disclosure

• Both parties agree to maintain strict confidentiality regarding the terms of this agreement and any proprietary information exchanged during negotiations, safeguarding sensitive business information.

IX. Governing Law and Dispute Resolution

• Any disputes arising from this agreement shall be governed by the laws of [Jurisdiction], with disputes resolved through arbitration conducted in [City], promoting efficient and amicable resolution of any disagreements.

X. Term Sheet Expiration

• This Term Sheet shall remain valid until [Expiration Date], providing a framework for further negotiation and execution of definitive legal agreements.

XI. Signatures

• This Term Sheet is subject to execution by authorized representatives of both parties, signifying mutual agreement and commitment to the outlined terms.

XII. Miscellaneous

• Any additional terms or conditions not explicitly outlined in this Term Sheet shall be negotiated and documented in subsequent legal agreements, ensuring comprehensive coverage of all relevant aspects of the investment.

Acknowledgment:

• The undersigned parties acknowledge their understanding and acceptance of the terms and conditions outlined in this Term Sheet, signaling readiness to proceed with further negotiations and due diligence.

[Investor Name]

[Date]

[Your Company Name]

[Date]

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