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.
A Hawaii Angel Investment Term Sheet is a document that outlines the terms and conditions of an investment deal between angel investors and entrepreneurs in the state of Hawaii. It serves as a preliminary agreement that outlines the basic structure and parameters of the investment before a more detailed legal agreement is created. The term sheet is typically created by the angel investor and includes relevant details such as the amount of investment, the equity stake the investor will receive in return for their investment, and any special terms or conditions attached to the investment. The Hawaii Angel Investment Term Sheet may also define the key milestones and performance targets the entrepreneur is expected to achieve, as well as any preferred rights or privileges that the angel investor may have, such as voting rights or liquidation preferences. There are various types of Hawaii Angel Investment Term Sheets, including: 1. Straight Equity Term Sheet: This type of term sheet outlines a straightforward equity investment, where the angel investor receives ownership in the company in proportion to their investment. 2. Convertible Debt Term Sheet: In this type of term sheet, the investment is structured as a loan, with the option to convert the debt into equity at a later stage, typically during a subsequent funding round. 3. SAFE (Simple Agreement for Future Equity) Term Sheet: The SAFE term sheet is a relatively new type of agreement that allows for a flexible investment structure, with the investor receiving the right to equity in the company upon the occurrence of certain trigger events, such as a future funding round or acquisition. 4. Preferred Equity Term Sheet: With this type of term sheet, the angel investor receives preferred shares in the company, which typically come with certain rights and privileges, such as liquidation or dividend preferences. It is important for both parties involved, the angel investor and the entrepreneur, to carefully review and negotiate the terms outlined in the Hawaii Angel Investment Term Sheet before proceeding with the investment.
