At SGM law we like to consider ourselves the ‘Founder’s Friend’. This is because for many of our clients we have been there to advise them from the start of their journey. We find that our clients prefer a jargon-free, simple approach when handling their business’s legal needs. We aim to make the founding of a company as stress-free as possible.
As a business grows there may be a need for external funding and we have helped many founders to negotiate their term sheets which will spell out the conditions on how the funds will be provided and what the impact will be on the business in the future.
A term sheet is often not legally binding but is still critical to get the terms of the investment settled at the outset - understanding what the investor wants and the terminology used makes this process less daunting.
We can walk you through the typical demands made in terms sheets and decide with you which you are happy with and which you should negotiate. We can guide you on what is fair and usual market practice. This will prevent you from signing up to something you don’t fully understand or which leaves you, and your business, exposed to the demands of the investor in the future.
Negotiating the term sheet is a key foundation for a successful partnership going forward. It should also help the business be prepared for the next fundraising.