Rhode Island Angel Fund Promissory Note Term Sheet

• Category: Small Business - Investment or Funding
• State: Multi-State
• Control #: US-ENTREP-004-1
• 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.

Rhode Island Angel Fund Promissory Note Term Sheet is a legal document that outlines the terms and conditions of a loan agreement between the Rhode Island Angel Fund (RAAF) and a borrower. This term sheet plays a crucial role in establishing a mutual understanding and formalizing the agreement. The Rhode Island Angel Fund Promissory Note Term Sheet typically includes key provisions and elements such as: 1. Loan Amount: This specifies the amount of funds that RAAF is willing to lend to the borrower. 2. Interest Rate: The term sheet highlights the fixed or variable interest rate that will be applied to the loan. It may also mention any changes to the interest rate during the loan term. 3. Repayment Terms: This section outlines the repayment schedule, including the frequency (monthly, quarterly, etc.) and the duration of the loan. It also specifies whether the payments will be made in installments or as a lump sum. 4. Maturity Date: The term sheet states the date upon which the loan should be fully repaid, also known as the maturity date. It clarifies the duration of the loan agreement. 5. Security/Collateral: If any collateral is required to secure the loan, the term sheet will mention it here. Common types of collateral include real estate, equipment, or other valuable assets. 6. Events of Default: This section outlines specific circumstances under which the borrower would be considered in default, such as missed payments, bankruptcy, or violating any terms of the loan agreement. 7. Governing Law: The term sheet specifies that the loan agreement will be governed by the laws of the state of Rhode Island, ensuring legal compliance throughout the loan process. Different types of Rhode Island Angel Fund Promissory Note Term Sheets may exist based on specific loan programs, such as: 1. Start-Up Funding Term Sheet: Tailored for early-stage businesses seeking capital to finance their launch or initial growth, this term sheet may have provisions that facilitate the unique needs and challenges of start-ups. 2. Expansion Financing Term Sheet: Geared towards established companies looking to expand their operations, this term sheet may include additional provisions like performance milestones or revenue targets. 3. Bridge Loan Term Sheet: This type of term sheet is designed for borrowers who need short-term financing to bridge a financial gap, often between rounds of equity funding or while awaiting other funding sources. It's essential for borrowers to carefully review the Rhode Island Angel Fund Promissory Note Term Sheet and seek legal advice to fully understand the terms and obligations before entering into the loan agreement with RAAF.