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Term Sheet Archives

Legal Considerations for Selling Your Emerging Growth Company Part 4: The Term Sheet or Letter of Intent

November 29, 2016 by Alexander J. Davie

A close up of a 'Letter of Intent'.If you have been following our series on the major legal steps involved in selling an emerging growth company, you know that we have already come a long way in negotiating an agreement with a financial adviser as well as entering into a non-disclosure agreement with your potential buyer. You probably would not have gotten this far in an actual deal without at least talking about the actual terms of the potential deal with the would-be buyer, but at this point it is finally time to get some of those terms on paper, even if that paper is less than legally binding and the terms remain subject to change based on the due diligence that will be conducted by the buyer. It is at this point that you and the buyer will work toward either a term sheet or letter of intent providing the preliminary framework for a potential sale of your business.

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Filed Under: Mergers & Acquisitions, Startups and Venture Capital Tagged With: M&A, Term Sheet

Venture Capital Term Sheet Negotiation — Part 21: No-Shop and Confidentiality Provisions

April 29, 2015 by Alexander J. Davie

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

In the prior twenty 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 provisions, anti-dilution provisions, anti-dilution carve-outs and “pay to play” provisions, redemption rights, registration rights,  management and information rights, preemptive rights, drag-along rights, representations and warranties, rights of first refusal and co-sale, closing conditions and expenses,non-competition and non-solicitation agreements, non-disclosure and developments agreements, board matters, and founders’ stock. In this final post, we will discuss no-shop and confidentiality provisions. [Read more…]

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Filed Under: Startups and Venture Capital Tagged With: Confidentiality, No-Shop, Term Sheet, Venture Capital, Venture Capital Term Sheet

Venture Capital Term Sheet Negotiation — Part 20: Founders’ Stock

March 24, 2015 by Alexander J. Davie

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

In the prior nineteen 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 provisions, anti-dilution provisions, anti-dilution carve-outs and “pay to play” provisions, redemption rights, registration rights,  management and information rights, preemptive rights, drag-along rights, representations and warranties, rights of first refusal and co-sale, closing conditions and expenses, non-competition and non-solicitation agreements, non-disclosure and developments agreements, and board matters. In this post, we will discuss founders’ stock.

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Filed Under: Startups and Venture Capital Tagged With: Founder, Founders' Stock, Term Sheet, Venture Capital, Venture Capital Term Sheet, Vesting

Venture Capital Term Sheet Negotiation — Part 19: Board Matters

February 5, 2015 by Casey W. Riggs

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

In the prior eighteen 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 provisions, anti-dilution provisions, anti-dilution carve-outs and “pay to play” provisions, redemption rights, registration rights,  management and information rights, preemptive rights, drag-along rights, representations and warranties, rights of first refusal and co-sale, closing conditions and expenses, non-competition and non-solicitation agreements, and non-disclosure and developments agreements. In this post, we will discuss board matters. [Read more…]

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Filed Under: Startups and Venture Capital Tagged With: Board Matters, Indemnification Agreement, Investor Rights Agreement, Term Sheet, Venture Capital, Venture Capital Term Sheet

Venture Capital Term Sheet Negotiation — Part 18: Non-Disclosure and Developments Agreements

January 14, 2015 by Alexander J. Davie

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

In the prior seventeen 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 provisions, anti-dilution provisions, anti-dilution carve-outs and “pay to play” provisions, redemption rights, registration rights,  management and information rights, preemptive rights, drag-along rights, representations and warranties, rights of first refusal and co-sale, closing conditions and expenses, and non-competition and non-solicitation agreements. In this post, we will discuss non-disclosure and developments agreements. [Read more…]

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Filed Under: Startups and Venture Capital Tagged With: Confidentiality Agreement, Developments Agreement, Invention Assignment, NDA, Non-Disclosure Agreement, Term Sheet, Venture Capital, Venture Capital Term Sheet

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About the editor

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Strictly Business is a business law blog for entrepreneurs, startups, venture capital, and the private fund industry. Its editor is Alexander J. Davie, an attorney at Riggs Davie PLC based in Nashville, Tennessee. His practice focuses on corporate, securities, and business law. He works mainly with technology companies, including startups and emerging companies, and private equity, venture capital, and hedge funds.
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