Posts Tagged ‘Venture Financing’
Entrepreneurs seeking venture financing are often presented by the potential investors with a term sheet. This is a good sign. It shows that the investors are seriously considering investing, beyond just talking to you! A term sheet is a document whose purpose is to negotiate and agree on the basic terms and conditions of the investment. Neither the company nor the investor is legally bound to follow through on the commitment unless and until formal agreements are reached by both parties. However, it provides the guidelines for the formal agreements and it is unusual for the parties to renegotiate fundamental terms after term sheet is signed. If the investor decides not to invest, the reasons are usually clear during the due-diligence process. Read the rest of this entry »