Hennepin Minnesota Angel Fund Promissory Note Term Sheet

• Category: Small Business - Investment or Funding
• State: Multi-State
• County: Hennepin
• 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." Hennepin Minnesota Angel Fund Promissory Note Term Sheet serves as a crucial document outlining the terms and conditions of a promissory note agreement entered into between the Hennepin Minnesota Angel Fund (IMAF) and the borrower. This term sheet provides a comprehensive overview of the key aspects of the agreement, ensuring clarity and transparency between the parties involved. The Hennepin Minnesota Angel Fund Promissory Note Term Sheet covers various important elements, including: 1. Borrower Details: This section includes information about the borrower, including their name, address, contact details, and legal representation, if applicable. 2. Lender Details: Here, the term sheet outlines the Hennepin Minnesota Angel Fund's information, such as the fund's name, address, contact details, and designated representatives responsible for any communication related to the promissory note. 3. Loan Amount and Purpose: The term sheet specifies the principal loan amount extended by the IMAF to the borrower. It also outlines the purpose for which the loan will be utilized, whether it is for business expansion, working capital, research, or any other justified need. 4. Interest Rate: This section determines the interest rate applicable to the loan, including any fixed or variable components, and states whether it is simple or compound interest. It may also include the details regarding any special interest rate provisions like grace periods or step-up rates. 5. Repayment Terms: The term sheet outlines the duration of the loan, specifying the repayment schedule and any milestones or deadlines for repayment installments. It may also include provisions for prepayment, late payment penalties, and default consequences. 6. Collateral or Security: If the loan requires collateral or security to safeguard the IMAF's investment, this section clearly defines the assets, property, or personal guarantees provided by the borrower. 7. Conversion or Equity Rights: In some cases, the IMAF may request conversion privileges, allowing them to convert the promissory note into equity or a stake in the borrower's business at a later stage. This section outlines the terms, conditions, and conversion ratio for such potential equity conversion. 8. Events of Default: The term sheet identifies the circumstances that qualify as a default on the promissory note, such as failure to make timely payments, breach of covenants, or violation of any terms outlined in the agreement. It may detail the consequences of default, including legal actions, penalties, or acceleration of the outstanding loan amount. Different types of Hennepin Minnesota Angel Fund Promissory Note Term Sheets may include variations in the aforementioned terms and may be customized depending on the specific requirements or preferences of the borrower and the IMAF. It is prudent for both parties to carefully review and negotiate the terms before signing the promissory note, ensuring mutual understanding and agreement on all terms and conditions outlined.

Hennepin Minnesota Angel Fund Promissory Note Term Sheet serves as a crucial document outlining the terms and conditions of a promissory note agreement entered into between the Hennepin Minnesota Angel Fund (IMAF) and the borrower. This term sheet provides a comprehensive overview of the key aspects of the agreement, ensuring clarity and transparency between the parties involved. The Hennepin Minnesota Angel Fund Promissory Note Term Sheet covers various important elements, including: 1. Borrower Details: This section includes information about the borrower, including their name, address, contact details, and legal representation, if applicable. 2. Lender Details: Here, the term sheet outlines the Hennepin Minnesota Angel Fund's information, such as the fund's name, address, contact details, and designated representatives responsible for any communication related to the promissory note. 3. Loan Amount and Purpose: The term sheet specifies the principal loan amount extended by the IMAF to the borrower. It also outlines the purpose for which the loan will be utilized, whether it is for business expansion, working capital, research, or any other justified need. 4. Interest Rate: This section determines the interest rate applicable to the loan, including any fixed or variable components, and states whether it is simple or compound interest. It may also include the details regarding any special interest rate provisions like grace periods or step-up rates. 5. Repayment Terms: The term sheet outlines the duration of the loan, specifying the repayment schedule and any milestones or deadlines for repayment installments. It may also include provisions for prepayment, late payment penalties, and default consequences. 6. Collateral or Security: If the loan requires collateral or security to safeguard the IMAF's investment, this section clearly defines the assets, property, or personal guarantees provided by the borrower. 7. Conversion or Equity Rights: In some cases, the IMAF may request conversion privileges, allowing them to convert the promissory note into equity or a stake in the borrower's business at a later stage. This section outlines the terms, conditions, and conversion ratio for such potential equity conversion. 8. Events of Default: The term sheet identifies the circumstances that qualify as a default on the promissory note, such as failure to make timely payments, breach of covenants, or violation of any terms outlined in the agreement. It may detail the consequences of default, including legal actions, penalties, or acceleration of the outstanding loan amount. Different types of Hennepin Minnesota Angel Fund Promissory Note Term Sheets may include variations in the aforementioned terms and may be customized depending on the specific requirements or preferences of the borrower and the IMAF. It is prudent for both parties to carefully review and negotiate the terms before signing the promissory note, ensuring mutual understanding and agreement on all terms and conditions outlined.