INVESTOR TERM SHEET

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This term sheet outlines the key terms and conditions of a strategic investment opportunity between Tech Innovations Inc. and Venture Capital Partners LLC. It serves as a foundational document to facilitate negotiations and formalize the investment agreement.

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I. Investment Details

• Investment Amount: The total investment amount agreed upon is $5,000,000.

• Valuation: The pre-money valuation of Tech Innovations Inc. is set at $20,000,000.

• Investment Structure: The investment shall be structured as a convertible note with a 5% interest rate and a maturity period of 24 months.

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II. Ownership and Equity

• Ownership Stake: Upon completion of the investment, Venture Capital Partners LLC shall acquire a 20% equity stake in Tech Innovations Inc.

• Founder Equity: Founders' equity shall be diluted to 60% post-investment.

• Investment Amount: Venture Capital Partners LLC agrees to invest a total amount of $2 million in Tech Innovations Inc. The investment shall be disbursed in tranches, subject to the achievement of predetermined milestones.

• Investment Amount: Venture Capital Partners LLC agrees to invest a total amount of $2 million in Tech Innovations Inc. The investment shall be disbursed in tranches, subject to the achievement of predetermined milestones.

• Investor Rights: Venture Capital Partners LLC shall have the right to appoint one member to the board of directors of Tech Innovations Inc. Additionally, the investor shall have the right to participate in future financing rounds to maintain its ownership percentage.

• Founders' Obligations: The founders of Tech Innovations Inc. agree to provide regular updates and reports to Venture Capital Partners LLC regarding the company's financial performance, strategic direction, and key milestones. The founders shall also adhere to the agreed-upon business plan and use the investment funds for the purposes outlined in this agreement.

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III. Rights and Obligations

• Board Representation: Venture Capital Partners LLC shall have the right to appoint one board member.

• Voting Rights: Voting rights shall be allocated in proportion to equity ownership.

• Information Rights: Venture Capital Partners LLC shall have access to quarterly financial reports and annual audits.

• Anti-Dilution Protection: In the event of a down-round, Venture Capital Partners LLC shall be entitled to anti-dilution protection.

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IV. Governance and Control

• Major Decisions: Major decisions, including changes to the company's capital structure, shall require 75% approval from the board.

• Exit Rights: Venture Capital Partners LLC shall have the right to participate in any sale or merger of Tech Innovations Inc.

• Drag-Along Rights: In the event of a sale, Venture Capital Partners LLC shall have the right to force other shareholders to participate.

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V. Legal and Regulatory

• Due Diligence: Both parties shall conduct due diligence to ensure compliance with all applicable laws and regulations.

• Governing Law: This agreement shall be governed by the laws of the State of California.

• Confidentiality: Both parties shall maintain the confidentiality of all information exchanged during the negotiation process.

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VI. Miscellaneous

• Closing Conditions: The investment shall be subject to certain closing conditions, including the approval of the board and completion of due diligence.

• Amendments: Any amendments to this agreement must be made in writing and signed by both parties.

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