Term Sheets for Dummies

August 25, 2009 · 1 comment

in Business

As I read Fred Wilson’s commentary on the Ideal First Round Term Sheet, I was thinking that it’d be nice if there was a “for dummies” type of introduction to the term sheet. A term sheet is the contract between the entrepreneur/company and the investors/VC.  It’s full of jargon that a first-time entrepreneur, who is busy building a company, is probably not familiar with.

Wouldn’t you know it, Brad Feld (another VC) has already written a very informative series on Term Sheets.  Here’s the entire series:

  1. Price
  2. Liquidation Preference
  3. Board of Directors
  4. Protective Provisions
  5. Drag Along
  6. Anti-Dilution
  7. Pay-to-Play
  8. Dividends
  9. Redemption Rights
  10. Conversion
  11. Conditions Precedent to Financing
  12. Vesting
  13. Information Rights
  14. Registration Rights
  15. Right of First Refusal
  16. Voting Rights
  17. Employee Pool
  18. Restriction on Sales
  19. Proprietary Information and Inventions Agreement
  20. Co-Sale Agreement
  21. Founders Activities
  22. Initial Public Offering Shares Purchase
  23. No Shop Agreement (also Unilateral or Serial Monogamy)
  24. Indemnification
  25. Assignment
  • http://gregorygo.com/2009/08/serendipitous-learning/ Serendipitous Learning

    [...] this is what happened today:  idle blog reading, leads to following link in the comments, leads to finding material written 4 [...]

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