An angel investor or angel (also known as a business angel or informal investor) is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. New start-up companies often turn to the private equity market for seed money because the formal equity market is reluctant to fund risky undertakings. In addition to their willingness to invest in a start-up, angel investors may bring other assets to the partnership. They are often a source of encouragement; they may be mentors in how best to guide a new business through the start-up phase and they are often willing to do this while staying out of the day-to-day management of the business.
Term sheet is a non-binding agreement setting forth the basic terms and conditions under which an investment will be made.
Georgia Angel Investment Term Sheet is a legal document that outlines the key terms and conditions of an investment deal between angel investors and startup companies in the state of Georgia. It serves as a foundation for negotiation and sets the framework for the investment agreement. The Georgia Angel Investment Term Sheet typically includes various important sections, such as: 1. Investment Amount: Specifies the total amount of investment the angel investor is willing to provide to the startup in exchange for equity or other agreed-upon terms. 2. Valuation and Price per Share: Determines the valuation of the startup and the price per share at which the angel investor will be investing. This valuation is crucial in determining the ownership percentage and dilution of existing shareholders. 3. Funding Structure: Outlines the structure of the investment, whether it will be a one-time investment or divided into multiple tranches based on the startup's achievement of predetermined milestones. 4. Board Representation: Specifies whether the angel investor will have the right to appoint a representative to the startup's board of directors or other decision-making bodies. 5. Liquidation Preferences: Defines the angel investor's preference in the event of a liquidation or acquisition of the startup. It determines the priority sequence in which the investors will receive their returns. 6. Anti-Dilution Protection: Provides protection to the angel investor in case of a future down-round financing, ensuring that their ownership percentage doesn't get significantly diluted. 7. Rights and Restrictions: Covers various rights and restrictions, such as the investor's right to participate in future funding rounds, veto rights on certain decisions, and limitations on transferring shares. 8. Intellectual Property: Addresses the ownership and protection of intellectual property created by the startup during the course of the investment. 9. Confidentiality and Non-Disclosure: Outlines provisions to ensure the confidentiality of the information and restricts the startup from disclosing certain proprietary information to third parties. While there might not be different types of Georgia Angel Investment Term Sheets per se, the specific terms and conditions can vary based on the negotiation between the angel investor and the startup. Each term sheet is tailored to reflect the unique characteristics, requirements, and risks associated with the investment opportunity.
