Cook Illinois Angel Fund Promissory Note Term Sheet

• Category: Small Business - Investment or Funding
• State: Multi-State
• County: Cook
• Control #: US-ENTREP-004-2
• 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." Cook Illinois Angel Fund Promissory Note Term Sheet is a legal document that serves as an outline or agreement to establish the terms and conditions of a promissory note between the Cook Illinois Angel Fund and the borrower. This term sheet highlights the important details and provisions that both parties must comply with throughout the duration of the agreement. The Cook Illinois Angel Fund Promissory Note Term Sheet typically includes the following elements: 1. Loan Amount: This section specifies the principal amount of money that will be lent to the borrower by the Cook Illinois Angel Fund. 2. Interest Rate: The term sheet outlines the interest rate that will be charged on the loan. This rate is the percentage at which the borrower is obliged to repay the borrowed funds, typically calculated on an annual basis. 3. Repayment Terms: The term sheet outlines the repayment terms, including the installment schedule, frequency of payments, and the total number of payments required to fully repay the loan. 4. Maturity Date: This section specifies the maturity date, which is the due date by which the entire loan amount must be repaid to the Cook Illinois Angel Fund. 5. Collateral: If applicable, the term sheet may outline any collateral requirements, wherein the borrower pledges assets as security for the loan. This safeguards the lender's interests in case of default. 6. Prepayment: The term sheet may include provisions related to prepayment, allowing the borrower to repay the loan in part or in full before the maturity date, often with specified penalties or fees. 7. Events of Default: This section outlines the conditions that constitute a default under the promissory note, such as late payments, non-payment, or breach of the agreed-upon terms. It also specifies the remedies available to the Cook Illinois Angel Fund in the event of default. 8. Governing Law: The term sheet may identify the governing law under which the promissory note and the relationship between the parties will be regulated and interpreted. Different types of Cook Illinois Angel Fund Promissory Note Term Sheets may exist depending on the specific nature of the loan. Some examples include: 1. Convertible Promissory Note Term Sheet: This term sheet outlines the terms and conditions of a convertible loan, which allows the Cook Illinois Angel Fund to convert its debt into equity in the borrower's company under certain circumstances, typically during a future financing round. 2. Participating Promissory Note Term Sheet: This type of term sheet includes provisions that grant the Cook Illinois Angel Fund the right to participate in the borrower's future profits or equity appreciation in addition to receiving interest on the loan. 3. Subordinated Promissory Note Term Sheet: This term sheet establishes a subordinate position for the Cook Illinois Angel Fund's loan, meaning that its repayment priority is lower than other existing lenders, providing additional protection to the senior lenders. By utilizing a Cook Illinois Angel Fund Promissory Note Term Sheet, both the lenders and borrowers can ensure that their rights and obligations are clearly documented and agreed upon, fostering a transparent and mutually beneficial financial relationship.

Cook Illinois Angel Fund Promissory Note Term Sheet is a legal document that serves as an outline or agreement to establish the terms and conditions of a promissory note between the Cook Illinois Angel Fund and the borrower. This term sheet highlights the important details and provisions that both parties must comply with throughout the duration of the agreement. The Cook Illinois Angel Fund Promissory Note Term Sheet typically includes the following elements: 1. Loan Amount: This section specifies the principal amount of money that will be lent to the borrower by the Cook Illinois Angel Fund. 2. Interest Rate: The term sheet outlines the interest rate that will be charged on the loan. This rate is the percentage at which the borrower is obliged to repay the borrowed funds, typically calculated on an annual basis. 3. Repayment Terms: The term sheet outlines the repayment terms, including the installment schedule, frequency of payments, and the total number of payments required to fully repay the loan. 4. Maturity Date: This section specifies the maturity date, which is the due date by which the entire loan amount must be repaid to the Cook Illinois Angel Fund. 5. Collateral: If applicable, the term sheet may outline any collateral requirements, wherein the borrower pledges assets as security for the loan. This safeguards the lender's interests in case of default. 6. Prepayment: The term sheet may include provisions related to prepayment, allowing the borrower to repay the loan in part or in full before the maturity date, often with specified penalties or fees. 7. Events of Default: This section outlines the conditions that constitute a default under the promissory note, such as late payments, non-payment, or breach of the agreed-upon terms. It also specifies the remedies available to the Cook Illinois Angel Fund in the event of default. 8. Governing Law: The term sheet may identify the governing law under which the promissory note and the relationship between the parties will be regulated and interpreted. Different types of Cook Illinois Angel Fund Promissory Note Term Sheets may exist depending on the specific nature of the loan. Some examples include: 1. Convertible Promissory Note Term Sheet: This term sheet outlines the terms and conditions of a convertible loan, which allows the Cook Illinois Angel Fund to convert its debt into equity in the borrower's company under certain circumstances, typically during a future financing round. 2. Participating Promissory Note Term Sheet: This type of term sheet includes provisions that grant the Cook Illinois Angel Fund the right to participate in the borrower's future profits or equity appreciation in addition to receiving interest on the loan. 3. Subordinated Promissory Note Term Sheet: This term sheet establishes a subordinate position for the Cook Illinois Angel Fund's loan, meaning that its repayment priority is lower than other existing lenders, providing additional protection to the senior lenders. By utilizing a Cook Illinois Angel Fund Promissory Note Term Sheet, both the lenders and borrowers can ensure that their rights and obligations are clearly documented and agreed upon, fostering a transparent and mutually beneficial financial relationship.