Anatomy of a Term Sheet: Index
Tuesday, August 24th, 2010Index to entries in our Anatomy of a Term Sheet series
Anatomy of a Term Sheet: Key Takeaways and Other Resources
Tuesday, August 24th, 2010In our very first post we said that our purpose in undertaking this Anatomy of a Term Sheet series was to give our readers the ability to better evaluate financing term sheets. We sincerely hope we’ve been able to shed at least a little light on the subject and we welcome your questions on any topic that is still a mystery.
Anatomy of a Term Sheet: No Shop and Confidentiality
Friday, August 20th, 2010Way back in the second post of this series, we noted that the No Shop/Confidentiality provision is one of the two provisions in the term sheet that is usually “binding” on the company and the investors – meaning it is enforceable even if the rest of the contemplated financing is never completed.
Anatomy of a Term Sheet: Vesting of Founders’ Stock
Tuesday, August 17th, 2010Investors often want at least a portion of the stock owned by each founder of a company to be subject to vesting and a corresponding company buyback right if the founder ceases to be employed by the company within a certain period of time after a financing.
Anatomy of a Term Sheet: Drag Along
Friday, August 13th, 2010A Drag Along provision compels a group of stockholders to vote in favor of a transaction approved by another group of stockholders and/or the company’s Board of Directors.
Anatomy of a Term Sheet: Election of the Board of Directors
Tuesday, August 10th, 2010The Board plays a pivotal role in the management of a company because it overseas the company’s officers (and has the power to replace them) and because Board approval is required for many corporate actions, including any action that materially impacts the corporation’s business. Not surprisingly, then, the composition of a company’s Board can be a contentious point of negotiation in a financing.
Anatomy of a Term Sheet: Right of First Refusal, Right of Co-Sale and Lock-Up
Tuesday, August 3rd, 2010The rights and restrictions set forth in the Right of First Refusal and Co-Sale Agreement are the Right of First Refusal and Right of Co-Sale, both of which apply to any proposed sale of stock by stockholders prior to the company’s initial public offering, and the Lock-up, which applies to sales by the common stockholders following the company’s initial public offering.