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 Wisconsin Angel Investment Term Sheet refers to a document that outlines the terms and conditions of an investment agreement between angel investors and startup companies based in Wisconsin. This term sheet sets the foundation for the investment relationship and serves as a blueprint for negotiating a final agreement. There are different types of Wisconsin Angel Investment Term Sheets, each tailored to suit the specific needs of the investors and the startup companies involved. These may include equity-based term sheets, convertible debt term sheets, or other structures that align with the preferences of the parties involved. The Wisconsin Angel Investment Term Sheet typically covers various key components essential to the investment process. These components include the investment amount, the valuation of the startup company, and the percentage of equity or debt that the investor will receive in return. Furthermore, the term sheet outlines the conditions under which the investor's funds will be provided, such as the timing and nature of the investment tranches. It may also specify any milestones or performance metrics that the startup company must achieve to receive subsequent rounds of investment. The term sheet also addresses matters related to corporate governance, including the rights and privileges of the angel investor, such as board seat appointment or observer rights. It may additionally highlight any protective provisions or veto rights granted to the investor to ensure their interests are safeguarded. Other crucial aspects covered in the Wisconsin Angel Investment Term Sheet include the terms of any potential exit strategy, such as expected timelines for a liquidity event or sale of the company. It may outline specific provisions related to the investor's preferred return on investment or anticipated multiple of their investment. Overall, the Wisconsin Angel Investment Term Sheet serves as a crucial document facilitating the investment process between angel investors and startup companies in Wisconsin. By covering a range of essential elements, it ensures transparency, clarity, and aligns the interests of both parties, laying the groundwork for a successful investment partnership.
