Sacramento California Gust Series Seed Term Sheet

• Category: Corporations - Business Formation
• State: Multi-State
• County: Sacramento
• Control #: US-ENTREP-0039-1-A
• Format: Word; Rich Text

Description

This term sheet for financing early stage companies with investments from sophisticated angel investors was developed by Gust, the platform powering over 90% of the organized angel investment groups in the United States. The goal was to standardize on a single investment structure, eliminate confusion and significantly reduce the costs of negotiating, documenting and closing an early stage seed investment. For those familiar with early stage angel transactions, this middle-of-the-road approach is founder-friendly and investor-rational, intended to strike a balance between the Series A Model Documents developed by the National Venture Capital Association that have traditionally been used by most American angel groups (which include a 17 page term sheet and 120 pages of supporting documentation covering many low-probability edge cases), and the one page Series Seed 2.0 Term Sheet developed in 2010 by Ted Wang of Fenwick & West as a contribution to the early stage community (which deferred most investor protections and deal specifics until future financing rounds.) The Gust Series Seed Term Sheet does meet Section 2.2 of the Founder Friendly Standard. The term sheet providesfor "reverse vesting"so the company can repurchase unvested stock if a Founder leaves before four years. Sacramento California Gust Series Seed Term Sheet is a comprehensive document outlining the terms and conditions of an investment deal in the context of startup funding. It serves as a discussion framework and a precursor to the formal legal agreement between a startup company and potential investors, specifically for seed-stage funding in the Sacramento, California region. The Gust Series Seed Term Sheet typically includes the following sections: 1. Capitalization and Valuation: This section details the pre-money valuation of the startup company and the amount of investment being sought. It also defines the ownership percentage that the investor will gain after the investment. 2. Investment Terms: It specifies the investment amount, the type of securities to be issued (typically preferred stock), and any proposed liquidation preferences, conversion rights, anti-dilution provisions, and board seat rights. 3. Founder Vesting: This section outlines the terms and conditions under which the founders' equity will vest. It usually includes a vesting schedule and potential acceleration triggers such as change of control or termination. 4. Voting Rights and Protective Provisions: It defines the voting rights and protective provisions, including major corporate decisions that require investor consent or consent of a majority of the preferred stockholders. 5. Dividends: This section covers the provisions related to the payment of dividends, if any, on preferred stock and outlines whether they are cumulative or non-cumulative. 6. Information Rights: It specifies the rights of the investor to receive regular and timely financial and operational information about the startup company. 7. Restriction on Transfer: This section outlines any restrictions on the transfer of securities, including rights of first refusal and co-sale/ tag-along rights. 8. Governing Law and Dispute Resolution: It determines the jurisdiction and governing law that will apply to the term sheet and outlines the preferred method for dispute resolution. Different types of Sacramento California Gust Series Seed Term Sheets include variations based on the specific investor preferences, negotiation points, and evolving market practices. These can be tailored to accommodate the unique needs of the startup and investors involved.

Sacramento California Gust Series Seed Term Sheet is a comprehensive document outlining the terms and conditions of an investment deal in the context of startup funding. It serves as a discussion framework and a precursor to the formal legal agreement between a startup company and potential investors, specifically for seed-stage funding in the Sacramento, California region. The Gust Series Seed Term Sheet typically includes the following sections: 1. Capitalization and Valuation: This section details the pre-money valuation of the startup company and the amount of investment being sought. It also defines the ownership percentage that the investor will gain after the investment. 2. Investment Terms: It specifies the investment amount, the type of securities to be issued (typically preferred stock), and any proposed liquidation preferences, conversion rights, anti-dilution provisions, and board seat rights. 3. Founder Vesting: This section outlines the terms and conditions under which the founders' equity will vest. It usually includes a vesting schedule and potential acceleration triggers such as change of control or termination. 4. Voting Rights and Protective Provisions: It defines the voting rights and protective provisions, including major corporate decisions that require investor consent or consent of a majority of the preferred stockholders. 5. Dividends: This section covers the provisions related to the payment of dividends, if any, on preferred stock and outlines whether they are cumulative or non-cumulative. 6. Information Rights: It specifies the rights of the investor to receive regular and timely financial and operational information about the startup company. 7. Restriction on Transfer: This section outlines any restrictions on the transfer of securities, including rights of first refusal and co-sale/ tag-along rights. 8. Governing Law and Dispute Resolution: It determines the jurisdiction and governing law that will apply to the term sheet and outlines the preferred method for dispute resolution. Different types of Sacramento California Gust Series Seed Term Sheets include variations based on the specific investor preferences, negotiation points, and evolving market practices. These can be tailored to accommodate the unique needs of the startup and investors involved.