Convertible Note Term Sheet

In the documents you will find many instances where provisions are surrounded by square brackets.

Convertible note term sheet. It is non binding and is not self executing. This term sheet is for discussion purposes only and is not binding on company or the investors as defined below. When you have a convertible note that debt will convert to equity in the next preferred round of financing a series seed a b c etc. This term sheet shall be governed in all respects by the laws of the state of delaware.

Convertible promissory notes the notes. A convertible note term sheet is a simple non legally binding document that records the major terms of negotiation between a company and investors for the issue of convertible notes. This term sheet outlines a convertible note financing appropriate for a privately held company. 1 the typical type of interest for a convertible note is simple.

As a general rule the shorter the term of the notes and the less risky the investment the lower the expected discount. This term sheet summarizes key terms of a proposed convertible note issuance for discussion purposes only. Variable text is in un secured un subordinated convertible note term sheet. Creating a convertible note term sheet helps facilitate discussion between the company and its investors in the negotiation stage.

As used herein a founder means. 3 convertible note financing term sheet seed stage start up drafting note to closing. If used a convertible note term sheet will usually contain the following terms. 2 the typical interest rate for a convertible note is 8 0 12 0.

Companies investors and their lawyers typically understand the mechanics of convertible notes. Aggregate amount of the round. The cooley go docs series seed convertible note financing documents generator allows you to generate any or all of the following documents. 3 the typical range of discounts that we see is 10 30.

A conversion discount negotiates a lower share price when you convert your note to stock. Securities to be issued. Although convertible note transaction documents are simple enough that no term sheet may be required they are often used to discuss the terms of the deal. The notes will be senior in right of payment to all other indebtedness of the company.