Investor Connect Podcast

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

In a fundraise, one typically uses the same term sheet throughout the raise.

From time to time, investors will demand certain rights and conditions.  

If there are no investor representations, then you may be able to do so.

For some investors, you may need to vary the terms of the raise and use a different term sheet.

The key is to keep the valuation the same but add additional terms to make the deal more attractive.

Additional terms include most-favored-nation status which means the investor gets the best deal that anyone else in the round gets. 

It also could include advisory and board positions, warrants, or redemption rights.

Lead investors often ask for special terms to compensate for their time and effort.

Investors spending time mentoring the team also may ask for these considerations.

Before changing the terms or using new term sheets, you should check with your attorney.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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Direct download: Startup_Funding_Espresso_--_Varying_the_Terms_of_the_Raise.mp3
Category:general -- posted at: 6:00am CST