THE TERM SHEET

Be ready to negotiate with investors

Business Plan
Financial Plan
Pitch Deck
Term Sheet
Due Dilligence

 What is a Term Sheet?

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This document is intended to founders of startups leaders who negotiate their first round of financing with professional investors risk capital (“Series A”). The goal is to give them guidance on terms that are both reasonable and effective in the long term.

The Term Sheet is inspired by the Galion Term Sheet Project. For more information about this Term Sheet project, just visit https://thegalionproject.com/term-sheet

The term in this document are the synthesis of the experience of French Tech Entrepreneurs. These entrepreneurs mostly very experienced, have negotiated hundreds of similar documents in the past 15 years. Some have lived in very concrete ways many practical situations which refer herein.

The spirit of the document is to be balanced between entrepreneurs and investors. Indeed, we believe that any unbalanced situation in one sense or another carries future problems. It is therefore a synthesis that gives a balance that we wished as pragmatic as possible the interests of all parties. These innovations follow on the real business case where the application of market standards clauses often proved dysfunctional.

A number of quantified elements are enclosed in brackets in the document. They correspond to typical parameters encountered on many issues. Nevertheless, one should not interpret too rigidly, and according to the particular configurations specific to each case, it should readjust. Some specific provisions are also in a bracket, which means they are optional, with usually a minor issue.

The document discussed here is not a shareholders’ agreement, but a letter of intent (“Term Sheet”). It is a document which is typically signed by the parties about a month before the transaction to prepare the drafting of legal documents. Over this document is accurate, then it makes writing the shareholders’ agreement and other closing documents (resolutions defining the terms of the investment, new statutes, investment contract and / or representations and warranties,…).

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