Term Sheet for an Investor
Term Sheet for an Investor
Date: August 30, 2060
This Term Sheet (the “Term Sheet”) summarizes the principal terms of the proposed investment (the “Investment”) in [YOUR COMPANY NAME], a Delaware corporation (the “Company”). This Term Sheet is for discussion purposes only and does not constitute a binding agreement except for the sections titled "Confidentiality" and "Exclusivity".
1. Investment Overview
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Investor: Venture Capital Partners, LLC
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Company: [YOUR COMPANY NAME]
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Amount of Investment: $5,000,000
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Type of Security: Series A Preferred Stock
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Pre-Money Valuation: $20,000,000
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Post-Money Valuation: $25,000,000
2. Investment Terms
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Price per Share: $10.00
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Number of Shares/Notes: 500,000 shares
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Closing Date: September 30, 2060
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Use of Proceeds: Product development, marketing, and operational expansion
3. Equity Ownership
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Investor’s Ownership Percentage: 20%
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Total Outstanding Shares Post-Investment: 2,500,000 shares
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Investor’s Pro-Rata Rights: The Investor shall have the right to participate in future financings to maintain their percentage ownership
4. Dividend Rights
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Dividend Rate: 8% per annum
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Dividend Payment Schedule: Annually
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Dividend Priority: Cumulative
5. Liquidation Preference
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Liquidation Preference: 1x
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Participation Rights: Non-Participating
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Conversion Rights: Convertible into common stock at the option of the holder
6. Governance
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Board Representation: 1 seat on the Board of Directors
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Observer Rights: Right to attend Board meetings as a non-voting observer
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Veto Rights: Investor has veto rights on major corporate decisions including mergers, acquisitions, and issuance of new securities
7. Warrants and Options
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Warrants/Options Granted: 100,000 warrants
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Exercise Price: $12.00
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Vesting Schedule: 4 years with a 1-year cliff
8. Confidentiality and Exclusivity
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Confidentiality: All terms and conditions discussed herein shall remain confidential and shall not be disclosed to any third party without prior written consent from both parties.
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Exclusivity: The Company agrees not to seek investment from other parties for a period of 60 days from the date of this Term Sheet.
9. Conditions Precedent
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Due Diligence: Completion of investor due diligence by September 15, 2060
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Legal and Financial Approvals: Approval from the Company’s legal and financial advisors
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Contract Execution: Finalization of definitive agreements by September 30, 2060
10. Miscellaneous
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Governing Law: The Term Sheet and any related agreements shall be governed by and construed in accordance with the laws of the State of Delaware.
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Dispute Resolution: Any disputes arising from this Term Sheet shall be resolved through arbitration in Delaware.
Acceptance:
This Term Sheet is non-binding except for the Confidentiality and Exclusivity sections. It reflects the current understanding of the parties but is subject to the negotiation and execution of definitive agreements.
Investor Signature:
Date: August 30, 2060
[YOUR COMPANY NAME] Representative Signature:
Date: August 30, 2060
