Venture Capital Term Sheet Negotiation — Part 16: Closing Conditions and Expenses

This post is the sixteenth in a series giving practical advice to startups with respect to understanding and negotiating a venture capital term sheet.

In the prior fifteen posts, we provided an introduction to negotiation of the term sheet and discussed binding and non-binding provisions and discussed valuation, cap tables, and the price per sharedividends on preferred stockliquidation preferencesthe conversion rights and features of preferred stockvoting rights and investor protection provisionsanti-dilution provisionsanti-dilution carve-outs and “pay to play” provisionsredemption rightsregistration rights,  management and information rightspreemptive rightsdrag-along rights, representations and warranties, and rights of first refusal and co-sale. In this post, we will discuss closing conditions and expenses. [Read more...]

Venture Capital Term Sheet Negotiation — Part 15: Rights of First Refusal and Co-Sale

This post is the fifteenth in a series giving practical advice to startups with respect to understanding and negotiating a venture capital term sheet.

In the prior fourteen posts, we provided an introduction to negotiation of the term sheet and discussed binding and non-binding provisions and discussed valuation, cap tables, and the price per sharedividends on preferred stockliquidation preferencesthe conversion rights and features of preferred stockvoting rights and investor protection provisionsanti-dilution provisionsanti-dilution carve-outs and “pay to play” provisionsredemption rightsregistration rights,  management and information rightspreemptive rights, drag-along rights, and representations and warranties. In this post, we will discuss rights of first refusal and co-sale. [Read more...]

Venture Capital Term Sheet Negotiation — Part 14: Representations and Warranties

This post is the fourteenth in a series giving practical advice to startups with respect to understanding and negotiating a venture capital term sheet.

In the prior thirteen posts, we provided an introduction to negotiation of the term sheet and discussed binding and non-binding provisions and discussed valuation, cap tables, and the price per share, dividends on preferred stock, liquidation preferences, the conversion rights and features of preferred stock, voting rights and investor protection provisionsanti-dilution provisionsanti-dilution carve-outs and “pay to play” provisions, redemption rights, registration rights,  management and information rightspreemptive rights, and drag-along rights. In this post, we will discuss founder representations and warranties. [Read more...]

Venture Capital Term Sheet Negotiation — Part 13: Drag-Along Rights

This post is the thirteenth in a series giving practical advice to startups with respect to understanding and negotiating a venture capital term sheet.

In the prior twelve posts, we provided an introduction to negotiation of the term sheet and discussed binding and non-binding provisions, discussed valuation, cap tables, and the price per share, discussed dividends on preferred stock, explained how liquidation preferences work, discussed the conversion rights and features of preferred stock, examined voting rights and investor protection provisions, analyzed anti-dilution provisions, looked at anti-dilution carve-outs and “pay to play” provisions, described redemption rights, examined registration rights,  looked at management and information rights, and explained preemptive rights. In this post, we will discuss drag-along rights. [Read more...]

Venture Capital Term Sheet Negotiation — Part 12: Preemptive Rights

This post is the twelfth in a series giving practical advice to startups with respect to understanding and negotiating a venture capital term sheet.

In the prior eleven posts, we provided an introduction to negotiation of the term sheet and discussed binding and non-binding provisions, discussed valuation, cap tables, and the price per share, discussed dividends on preferred stock, explained how liquidation preferences work, discussed the conversion rights and features of preferred stock, examined voting rights and investor protection provisions, analyzed anti-dilution provisions, looked at anti-dilution carve-outs and “pay to play” provisions, described redemption rights, examined registration rights,  and looked at management and information rights. In this post, we will discuss preemptive rights. [Read more...]