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 Oregon Angel Investment Term Sheet refers to a legal document that outlines the terms and conditions of an investment agreement between angel investors and startup companies located in Oregon, United States. This term sheet serves as a preliminary agreement that serves as the basis for negotiating and finalizing an official investment agreement. The Oregon Angel Investment Term Sheet typically contains various important clauses and provisions that protect the interests of both the investors and the startup, ensuring a fair and transparent investment process. These term sheets are specifically designed to cater to the unique needs and regulations of the Oregon investment landscape. Key components of the Oregon Angel Investment Term Sheet may include: 1. Investment Amount: This specifies the total amount of funding that the angel investor is willing to provide to the startup company. It may also outline the terms of investment, such as whether the investment will be made as a lump sum or in stages. 2. Valuation: This section determines the overall value of the startup company, taking into account factors such as market trends, revenue projections, intellectual property, and the potential for growth. The valuation is essential for determining the percentage of ownership the angel investor will receive in exchange for their investment. 3. Ownership and Equity: This clause defines the percentage of ownership that the angel investor will have in the startup. It may also outline whether the investor will receive common or preferred stock, as well as any special rights or privileges associated with the equity position. 4. Voting Rights: This section specifies the extent of the angel investor's voting rights within the company. It may include provisions for board representation, voting on major business decisions, and other matters that require shareholder consent. 5. Liquidation Preference: This clause determines the priority of payment in the event of a liquidation or sale of the startup. It outlines the order in which investors and other stakeholders will receive their investments back, including any accrued interest or dividends. 6. Rights and Restrictions: This section covers any additional rights or restrictions the angel investor may have, such as anti-dilution provisions, rights of first refusal, restrictions on the transfer of shares, or information rights. 7. Exit Strategy: This clause outlines the options for the angel investor to exit their investment, such as through an initial public offering (IPO), acquisition, or sale of the startup. It may also include provisions for the timeline and conditions for a successful exit. Different types of Oregon Angel Investment Term Sheets may vary depending on the specific needs and preferences of both the angel investor and the startup. For example, there can be term sheets specifically designed for seed-stage investments, early-stage investments, or growth-stage investments. Furthermore, industry-specific term sheets may exist to cater to particular sectors like technology, healthcare, or clean energy. These variations ensure that the term sheet aligns with the unique requirements and risks associated with different investment stages and industries.
