As every parent knows, small children never fall ill during the day. When a child wakes up with a raging fever (or in a pool of vomit) at 2 am, the parent usually has one overriding concern: is it something serious that merits a visit to the ER? If only a doctor were...
Every other night, my wife and I put our kids to bed and settle down on the couch to watch some Netflix. When I mentioned this to my mother, who doesn’t have Netflix, she asked curiously, “so which serials do you watch?”. I flinched. We don’t...
The Company and the Founders shall complete an initial public offering or a ‘strategic sale’ within 5 years from the Closing Date (“Exit Date”) on terms that are acceptable to the Investor. The failure of Company and Founders to provide an exit by the Exit Date shall not relieve the Company / Founders of their obligations to provide an exit to the Investor, which shall continue until the Investor ceases to hold any shares. In case of failure to provide exit, the Investor shall inter-alia have a drag along right on all other shareholders of the Company.
Liquidation Preference
Higher of 1x or pro rata entitlement on an as-if converted basis in any liquidity event. Liquidity event shall be defined in the definitive documents and will inter alia include change in control or sale of substantially all of the assets of the Company.
Pre-Emptive Rights
The Investor shall, in any subsequent offering of securities by the Company, have a right to maintain their shareholding in the Company. [Note to Draft: Any super pro rata rights will be over and above this and should be included here]
Valuation
The valuation section concerns what an investor believes the company is worth. valuation issues addressed in the term sheet will include: pre-money valuation, post-money valuation, capitalization table and price per share.
