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Chapter 10: anatomy of a venture-capital transaction.
- Article from:
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Raising Capital
- Article date:
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January 1, 2000
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Copyright informationCOPYRIGHT 2000 The Kiplinger Washington Editors, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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ONCE YOU AND YOUR POTENTIAL INVESTORS HAVE analyzed all the key relationship, financial and structural factors from the risk, reward and control perspectives, you can create a term sheet. The term sheet sets forth the key financial and legal terms of the transaction, which will then serve as a basis for preparation of the definitive legal documents. The term sheet may also contain certain rights and obligations for both parties, such as an obligation to maintain an agreed valuation, to be responsible for certain costs and expenses in the event the proposed transaction does not take place, or to secure commitments for financing from additional sources (such as the supplemental ...