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 Oklahoma Angel Investment Term Sheet is a legally binding document that outlines the terms and conditions of an investment made by angel investors into early-stage Oklahoma-based startups. This agreement acts as a guide for both the startup founders seeking investment and the angel investors providing the funding. The term sheet covers several key aspects of the investment, including the investment amount, valuation of the startup, equity ownership percentage, and any additional terms and conditions agreed upon between the parties involved. It serves as a basis for negotiating the final terms of the investment agreement and helps protect the interests of both the investors and the startup. In Oklahoma, there are different types of Angel Investment Term Sheets that may be used depending on the specific requirements and preferences of the parties involved. These may include: 1. Standard Term Sheet: This is the most common type of term sheet used in angel investments in Oklahoma. It typically covers the essential terms and conditions such as the investment amount, equity percentage, and voting rights. 2. Preferred Term Sheet: This type of term sheet is designed to provide additional benefits and protections to the angel investors. It may include provisions for preferential rights, liquidation preferences, anti-dilution, or participation rights, which can enhance the return on investment for the angel investors. 3. Convertible Note Term Sheet: In some cases, angel investors may choose to provide funding through a convertible note instead of direct equity investment. A Convertible Note Term Sheet outlines the terms under which the loan can convert into equity at a later stage. 4. SAFE (Simple Agreement for Future Equity) Term Sheet: SAFE is an alternative to the convertible note, which has gained popularity in recent years. A SAFE Term Sheet outlines the terms of an agreement where the angel investors provide funding in exchange for the right to convert their investment into equity at a future financing round or event. It is essential for both parties to carefully review and negotiate the term sheet before proceeding with the investment. Each term sheet can be customized to address the specific needs and goals of the startup and angel investors involved, allowing for a mutually beneficial arrangement.
