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 North Carolina Angel Investment Term Sheet is a legal document that outlines the terms and conditions of an investment made by angel investors in a startup or early-stage company based in North Carolina. The term sheet serves as a guide and reference for both the investors and the company, ensuring that both parties are aligned on the key aspects of the investment deal. There can be different types of North Carolina Angel Investment Term Sheets based on the specific requirements and preferences of the investors and the company. Some commonly found types include: 1. Equity Investment Term Sheet: This type of term sheet is focused on equity financing, where angel investors acquire a certain percentage of ownership in the company in exchange for their investment. It typically includes details about the percentage of equity being acquired, the valuation of the company, and any rights or restrictions attached to the shares. 2. Convertible Note Term Sheet: In this type of term sheet, angel investors provide a loan to the company, which can be later converted into equity based on predefined conversion terms, usually at a future funding round. It includes information about the interest rate, conversion discount, valuation cap, and maturity date for the note. 3. SAFE (Simple Agreement for Future Equity) Term Sheet: SAFE is an increasingly popular investment instrument that allows angel investors to make a cash investment in a company, which will convert into equity at a future specified event, such as a future funding round or acquisition. The SAFE term sheet outlines the terms of the investment, including the valuation cap, discount rate, and any additional rights or preferences. 4. Mezzanine Financing Term Sheet: Mezzanine financing is a hybrid form of debt and equity, often used in later-stage investments. This term sheet would include details about the loan agreement, interest rate, conversion rights, and any additional conditions or covenants attached to the investment. These are just a few examples of the North Carolina Angel Investment Term Sheets, and it is important to note that the specific terms and conditions can vary significantly depending on the requirements and negotiation between the entrepreneurs and the angel investors.
