Term Sheet Examples & Templates
To put it simply, Term Sheets are complicated. This is because investment terms, company valuation, and the longer-term implications of investment terms are not “one size fits all.” In fact, these are some of the biggest areas of confusion for early stage founders.
To help with that, we’ve compiled some great free term sheet resources available to startup and small business owners looking for guidance and sample term sheet agreements. These resources come from leading investors, VCs, and legal firms from TechStars to Founders Fund to Cooley and the Kauffman Foundation.
Here are some great term sheet and fundraising resources on the web for you.
Resources and Term Sheets available for download on the TechStars site, with documents created by Cooley, LLP: TechStars Docs
Equity Term Sheets
Convertible Note Term Sheets
TheFunded.com and Wilson Sonsini Law Firm put together this sample Convertible Note and had it written up and explained on TechCrunch
Y Combinator’s “Simple Agreement for Future Equity” or SAFE
Alternative Financing Mechanisms
Personal Investment Contracts as innovated on and explained by Rafe Furst, angel investor, mentor at the Unreasonable Institute, co-founder of Crowdfunder.com
Creating Your Term Sheet & Equity Crowdfunding
After reading through these resources, be sure and consult and work with an experienced attorney to create the right financial offering that makes sense both for your company, and for investors.
Finally, one of the more subjective areas is Startup Valuation. To look at some data and info to guide you, take a look at this post from the Angel Capital Association on Pre-Money Valuations of early stage angel / Seed deals.
Take-aways from early stage angel deal valuations from a variety of sources are:
Median pre-money valuation in 2011 and 2012 for software/internet startups was $2.5MM
The median for life science startups was $3.2MM, and clean tech $3MM
Valuations in Silicon Valley, LA, Boston, New York higher than elsewhere in US
*Disclaimer: This article should not be considered legal advice, nor we proposing to shape terms for your company’s round.