Kentucky Angel Fund Promissory Note Term Sheet

• Category: Small Business - Investment or Funding
• State: Multi-State
• Control #: US-ENTREP-004-2
• Format: Word; Rich Text

Description

"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."

The Kentucky Angel Fund Promissory Note Term Sheet is a legal document that outlines the terms and conditions for a loan agreement between a borrower and the Kentucky Angel Fund. This document is crucial for both parties as it serves as a preliminary agreement before the final promissory note is drafted. The term sheet highlights key information such as the principal amount of the loan, interest rate, repayment schedule, and any additional fees or charges. It also specifies the terms of default and remedies available to the lender in case of non-payment. This document aims to provide transparency and clarity regarding the loan agreement, ensuring that all parties involved understand their obligations and rights. Kentucky Angel Fund Promissory Note Term Sheets can vary depending on the specific loan requirements or nature of the borrower. Different types may include: 1. Convertible Note Term Sheet: This term sheet outlines the terms for a loan that can be converted into equity in the future, typically during a specified event such as a funding round or an acquisition. 2. Simple Interest Note Term Sheet: This type of term sheet highlights a loan agreement where interest is charged at a fixed rate, calculated based on the principal amount and a predetermined interest rate. 3. Mezzanine Note Term Sheet: Mezzanine financing typically involves agreements that have both debt and equity features. A Mezzanine Note Term Sheet outlines the terms for such financing arrangements, including interest rates, payment schedules, and conversion options. 4. Secured Note Term Sheet: This term sheet pertains to a loan that is secured by collateral, such as property or assets owned by the borrower. It outlines the terms and conditions related to the security interest, repossession rights, and valuation of collateral. 5. Bridge Note Term Sheet: Bridge financing provides short-term funding to bridge a financial gap until a more permanent solution is in place. The Bridge Note Term Sheet specifies the repayment terms and conditions for this interim financing. Overall, these various types of Kentucky Angel Fund Promissory Note Term Sheets cater to the specific needs and circumstances of borrowers seeking funding from the Kentucky Angel Fund. Each term sheet provides a comprehensive framework for loan agreements, giving borrowers and lenders the necessary clarity to navigate the financing process effectively.