For those of you looking for some additional sample material, I've attached an annotated term sheet by Craig Brown a lawyer at Fasken Martineau DuMoulin LLP. Craig is a super smart lawyer who has been doing the term sheet cha cha for a long time.
And as a special prize, here is something you might want to get from Suzanne at Venture Law Associates. As you may recall, we did a session for the Toronto Venture Group about term sheets, documents for a financing, etc.
Suzanne took the documents I provided and marked them up as if she had been council for the entrepreneur. This is a pretty sweet piece of material as it will give you both a final set of documents that were used in a recent financing as well as a really good lawyer telling you what she would have further negotiated.
If you'd like to get these documents (keeping in mind they apply to Canada, your milege may vary), contact Suzzanne and ask her for the marked up documents from the TVG breakfast.
Great term sheet. Easy to read and understand. Nothing to onerous considering that you're the one with the money. I've sent Suzzane a note regarding her marked up version. It will be interesting to see what the "other side" thinks of the deal.
Cheers,
Peter
Posted by: Peter Cranstone | January 15, 2007 at 09:00
That's why they call us the "friendly" VC. The they? wives, kids, etc. :-)
Posted by: Rick Segal | January 15, 2007 at 09:02
Great post on Liquidity Preference and a very helpful document for review. Thanks for the open disclosure, Rick.
- M
Posted by: Michael Garrity | January 15, 2007 at 12:40