Standard Seed Term Sheet

I. Overview

This Term Sheet outlines the principal terms and conditions proposed for an investment in [Your Company Name], a company organized and existing under the laws of [State]. This document serves as a basis for the definitive agreement. The terms are intended for discussion purposes only and are subject to change pending legal review and negotiations.

By setting the framework for the investment, this Term Sheet aims to streamline the negotiation process, ensuring clarity and efficiency for both the investors and [Your Company Name]. This document constitutes a non-binding agreement except in certain cases such as confidentiality and exclusivity, which are explicitly specified.

II. Parties Involved

This Term Sheet involves [Investor Name], herein referred to as "Investor," and [Your Company Name], herein referred to as "Company." The designated representatives for each party are [Investor's Name] for the Investor and [Your Name] for the Company.

The responsibilities of each party will be defined in the definitive agreements, thereby facilitating a clear understanding and operational transparency post-investment.

III. Investment Details

• Total Investment Amount: [$ Investment Amount]

• Percentage of Equity Offered: [Equity Percentage]%

• Type of Shares: [Type of Shares]

• Valuation of the Company (Pre-Money): [$ Pre-Money Valuation]

The investment will be structured as a purchase of [Type of Shares] shares at a valuation agreed upon based on the company’s performance and prognosis. These terms are intended to reflect the mutual investment interests and the future potential seen in [Your Company Name].

This section specifies how funding will be disbursed and outlines any significant conditions tied to these financial arrangements, such as milestone-based disbursement or similar conditions ensuring commitment and shared risk.

IV. Use of Funds

The raised funds will be primarily used for the following purposes, detailed adequately to assure the investors of their prudent investment:

• Scale the business operations in [Specific Locations or Markets]

• Enhance product development specifically in [Specify Areas]

• Expand the team, especially in [Key Functions]

• Increase marketing and sales activities to accelerate user growth

It is crucial that the use of the invested capital is aligned with the strategic goals of [Your Company Name], aiming to accelerate growth and achieve a sustainable competitive position in the market.

V. Governance

Post-investment, the governance structure will include provisions for investor involvement at strategic levels:

• Appointment of [Investor's Designate] to the Board of Directors

• Regular reporting requirements including but not limited to financials, operational metrics, and strategic decisions

These governance terms are intended to maintain high standards of accountability and performance, thereby supporting the company's growth trajectory while safeguarding the investor's interests.

VI. Key Terms and Conditions

Several key provisions will be detailed in the definitive agreements, to include:

• Anti-dilution protection

• Pre-emptive rights to future financings

• Information rights and obligations

• Drag-along and tag-along rights

These terms aim to protect the investment while also allowing the company flexibility to operate effectively and pursue additional growth opportunities.

VII. Confidentiality

Both parties agree to maintain confidentiality regarding the negotiation and terms outlined unless mutually agreed upon disclosure is necessary. This confidentiality obligation will be binding, with specific terms to be delineated in a separate confidentiality agreement.

Fulfillment of these confidentiality protocols is essential to foster trust and facilitate a smooth investment and operational transition process.

VIII. Exclusivity

The Investor will be granted an exclusivity period, during which [Your Company Name] agrees not to solicit or engage in investment discussions with other potential investors. This period will last for [Number of Days] days from the date of this Term Sheet's execution.

This exclusivity is intended to provide both parties sufficient time to conduct due diligence in a secure and focused manner, leading to a successful investment closing.

IX. Miscellaneous

This Term Sheet is governed by the laws of [Jurisdiction] and constitutes the entire agreement in respect to the investment. It supersedes all prior discussions, understandings, and agreements. Any modifications to this term sheet must be made in writing and signed by both parties.

By signing below, the Investor and the Company acknowledge that, except as mentioned, this Term Sheet does not create binding obligations on either party and is used solely as a proposal reflecting the current state of negotiations.

Company: [Your Company Name]

Date: [Date Signed]

Name: [Investor's Name]

Date: [Date Signed]

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