Jeff Bussgang from Flybridge has today’s great VC post titled In VC deals, Price Doesn’t Matter – But The "Promote" Does. While I personally dislike the phrase “promote” to describe the concept Jeff is describing (I think “founders post-deal ownership value” – or FPDOV – is a much better phrase, although I realize “promote” is […]
Topic: Term Sheets
Today, our friends at Techstars posted their model forms of seed financing documents. Techstars worked with Brad, myself and very closely with Cooley Godward Kronish, LLP (and specifically Mike Platt) to put together a set of “Model Seed Funding Documents” that anyone can use. There are five primary documents in the set: Term Sheet Articles […]
Q: Can you please explain what sort of adjustments you should expect to the price that a VC promises in a term sheet between the signing of the term sheet and signing of a final stock purchase agreement (SPA)? A: (Jason) To answer your question, we first need to determine what the definition of "price" […]
Q: Thank you very much for your term sheet series. Not being that familiar with "specific" term sheets, I have heard something about VC terms that effectively allow the VC to fire the founder(s) and in the process relieve them of their shares since they had then left the company before liquidity. I have read […]
Gigaom’s FoundRead has today’s great post up titled F|R Crib Sheet: The Term Sheet Glossary guest written by Jay Parkhill. While you can always entertain yourself for hours with the Term Sheet Series that Jason and I wrote several years ago, sometimes a crib sheet will suffice.
Q: Is it customary for an equity investor to have a veto right over future investments that are at parity or senior to that series? Do you see it often? Do you ever see it limited by the percentage ownership (e.g. if the series becomes a less than 10% shareholder, the veto right goes away)? […]