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  Series AA Preferred Stock Financing Term Sheet

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Series AA Preferred Stock Financing Term Sheet
1.0.0  Series AA Preferred Stock Financing Term Sheet - TechStars.org open-sourced forms available at http://www.techstars.com/docs/
Public   Published   markoblad   markoblad  (owner)
Permalink: https://valcu.co/users/markoblad/doc_templates/series-aa-preferred-stock-financing-term-sheet-v1_0_0
Created: March 23, 2016 9:59:48 EDT | Last modified: March 24, 2016 11:20:56 EDT
 

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Company name

date

Entity Type

Expiration date

Outstanding Founder Common Number Shares

Outstanding founder common shares percent

Granted Option Number Shares

Granted option shares percent

Available Option Number Shares

Available option shares percent


Is separate out incubator accelerator shares applicable?

Incubator accelerator name

Incubator Accelerator Number Shares

Incubator accelerator shares percent


Is use share class other than common for incubator accelerator shares applicable?

Incubator accelerator share class

Investor Number Shares

Investor shares percent

Total Number Shares

Original Issue Price Precise Dollar Per Share

Post Money Dollar Valuation

Maximum Offering Dollar Amount

Minimum Offering Dollar Amount


Is custom board terms applicable?

Board Number Seats

Board Members
 
 

Founder name 1

Founder name 2

Investor rep name


Is custom qualified financing threshold applicable?

Custom Qualified Financing Dollar Threshold


Is custom additional terms applicable?

Custom additional terms language


Is include signature blocks applicable?

Company signer name

Company signer title


V_FIELD_COMPANY_NAME_UPCASE
MEMORANDUM OF TERMS
SERIES AA PREFERRED STOCK FINANCING
v_field_date
This memorandum summarizes the principal terms proposed by v_field_company_name, a Delaware v_field_entity_type (the “Company”), with respect to a private placement of its Series AA preferred stock. This term sheet expires on v_field_expiration_date.
Capitalization
Set forth below is the Company’s current fully diluted capitalization, as adjusted to reflect the sale of all shares of Series AA preferred stock proposed to be offered in this financing:

Shares
Ownership %
Type

Founders / Common
v_field_outstanding_founder_common_number_shares
v_field_outstanding_founder_common_shares_percent
Common

Granted Stock Options
v_field_granted_option_number_shares
v_field_granted_option_shares_percent
Common

Available Stock Option under Plan
v_field_available_option_number_shares
v_field_available_option_shares_percent
Common

v_field_separate_out_incubator_accelerator_shares_applicability v_field_incubator_accelerator_name
v_field_incubator_accelerator_number_shares
v_field_incubator_accelerator_shares_percent
v_field_use_share_class_other_than_common_for_incubator_accelerator_shares_applicability v_field_incubator_accelerator_share_class v_field_else Common v_field_end

v_field_table_row_end Series AA Investors
v_field_investor_number_shares
v_field_investor_shares_percent
Series AA Preferred Stock

Total
v_field_total_number_shares
100%




Proposed Private Placement
The Company proposes a private placement of shares of Series AA convertible preferred stock to a limited number of “accredited” investors on the following terms:
Number of Series AA Shares Offered:
Up to v_field_investor_number_shares shares.

Price Per Series AA Share:
v_field_original_issue_price_precise_dollar_per_share (the “Original Purchase Price”). The Original Purchase Price represents a post-money valuation of v_field_post_money_dollar_valuation.

Total Amount of Offering:
Up to v_field_maximum_offering_dollar_amount, but not less than v_field_minimum_offering_dollar_amount.

Dividends:
The holders of the Series AA shall be entitled to participate pro rata in any dividends paid on the Common Stock on an as-if-converted basis. Dividends are payable only when, as and if declared by the Board of Directors.

Liquidation Preference:
In the event of any liquidation or winding up of the Company, the holders of Series AA shall be entitled to receive in preference to the holders of the Common Stock a per share amount equal to the greater of: (i) the Original Purchase Price plus any declared but unpaid dividends or (ii) the amount such holder would have received had the shares of Preferred Stock been converted into Common Stock immediately prior to the liquidation or winding up (the “Liquidation Preference”). After the payment of the Liquidation Preference to the holders of the Series AA, the remaining assets of the Company shall be distributed to the holders of the Common Stock on a pro-rata basis. A consolidation, merger, acquisition, sale of voting control or sale of all or substantially all of the assets of the Company in which the stockholders of the Company do not own a majority of the outstanding shares of the surviving corporation shall be deemed to be a liquidation or winding up for purposes of the Liquidation Preference.

Conversion:
The holders of the Series AA shall have the right to convert the Series AA, at any time, into shares of Common Stock. The initial conversion rate shall be 1:1, subject to adjustment as provided below. The Series AA shall be automatically converted into Common Stock (i) if the holders of at least a majority of the outstanding Series AA consent to such conversion or (ii) upon the closing of a firmly underwritten public offering of shares of Common Stock of the Company offering with total proceeds to the Company of not less than fifteen million dollars ($15,000,000) (before deduction of underwriters’ commissions and expenses) (a “Qualified IPO”).

Board of Directors:
v_field_custom_board_terms_applicability The size of the Company’s Board of Directors shall be set at v_field_board_number_seats. The Board shall initially be comprised of v_field_board_member_hashes_each v_field_board_member_hashed_name as representatives of the v_field_board_member_hashed_series_of_stock_representing v_field_board_member_hashed_include_sunset_on_right_applicability; provided that such board seat shall terminate in the event that the Stockholders entitled to such right do not retain at least 5% of the Company’s capital stock calculated on an a fully diluted basis v_field_end v_field_semicolon_conjunctive v_field_end. v_field_else The size of the Company’s Board of Directors shall be set at 3. The Board shall initially be comprised of v_field_founder_name_1 and v_field_founder_name_2 as representatives of the Common Stock, and v_field_investor_rep_name as a representative of the Series AA investors; provided that such Series AA board seat shall terminate in the event that the Series AA Stockholders do not retain at least 5% of the Company’s capital stock calculated on an a fully diluted basis. v_field_end

Conversion Price Adjustments:
The conversion price of the Series AA shall be subject to broad-based weighted average anti-dilution protection (with customary exceptions) to reduce dilution in the event that the Company issues additional equity securities at a purchase price less than the applicable conversion price.

Voting Rights:
The Series AA will vote together with the Common Stock and not as a separate class except as specifically provided herein or as otherwise required by law. Each share of Series AA shall have a number of votes equal to the number of shares of Common Stock then issuable upon conversion of such share of Series AA.

Protective Provisions:
The consent of holders of at least a majority of the Series AA shall be required for any amendment to the Company’s Certificate of Incorporation which adversely affects the rights, preferences or privileges of the Series AA.

Investor Rights:
Upon the closing of an additional financing round pursuant to which the company grants customary investors rights, the holders of Series AA shares shall be made parties to any investors rights agreement (or similar agreement providing for information, voting, registration, preemptive or similar rights); provided that, each Series AA Holder must execute such agreement and be subject to the terms of such agreement in the same manner as other investors and such right shall terminate following the company’s closing of additional equity investments of more than v_field_custom_qualified_financing_threshold_applicability v_field_custom_qualified_financing_dollar_threshold v_field_else $750,000 v_field_end (a “Qualified Financing”).

Information Rights:
The Company shall provide in a reasonable timeframe to each Investor annual financial statements.

Right of First Refusal:
Investors shall have the right in the event the Company proposes to offer equity securities to any person (other than securities issued to employees, officers and directors of the Company, securities issued pursuant to a merger or acquisition, securities issued in connection with an equipment leasing or debt financing, securities issued pursuant to a registration statement, or securities issued in connection with strategic transactions) to purchase their pro rata portion of such shares. Each Investor’s pro rata portion shall be calculated by dividing the outstanding shares of Series AA held by such investor by the total number of shares outstanding on a fully-diluted basis. Such right of first refusal will terminate upon a Qualified IPO or upon an acquisition, merger or consolidation of the Company and may be waived, modified or terminated on behalf of all Investors by a majority in interest of the Investors. Such right may be terminated, waived or modified in any manner by a majority of the Series AA Preferred and shall terminate following a Qualified Financing.

Expenses:
Each party shall pay their own fees and expenses.



v_field_custom_additional_terms_applicability
v_field_custom_additional_terms_language_no_period.
v_field_end
The investment shall be made pursuant to a subscription agreement and other documentation reasonably acceptable to the Company and the investors. The term sheet is not legally binding on any parties and is subject to the satisfactory completion of due diligence and the execution of mutually agreed upon definitive documents.
v_field_include_signature_blocks_applicability


TechStars.org - Series AA Model Term Sheet – Valcu scripted
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TechStars.org - Series AA Model Term Sheet – Valcu scripted
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Accepted and Agreed:
COMPANY:
v_field_company_name_upcase
v_sig_company_chained_titled
v_field_else
By:________________________
Name: v_field_company_signer_name
Title: v_field_company_signer_title
v_field_end
Accepted and Agreed:
INVESTORS:
v_sigs_investors
v_sig_investor_chained_titled
v_sigs_investors_hashed_name_upcase
v_field_else
By:________________________
Name:_____________________
Title:______________________
v_field_end
v_sigs_end
v_field_end
TechStars.org - Series AA Model Term Sheet – Valcu scripted
v_field_doc_template_id | v_field_file_store_id
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v_field_doc_template_id v_field_file_store_id
v_field_doc_template_id v_field_file_store_id
v_field_company_name_upcase v_field_date v_field_company_name v_field_entity_type v_field_expiration_date v_field_outstanding_founder_common_number_shares v_field_outstanding_founder_common_shares_percent v_field_granted_option_number_shares v_field_granted_option_shares_percent v_field_available_option_number_shares v_field_available_option_shares_percent v_field_separate_out_incubator_accelerator_shares_applicability ├── v_field_incubator_accelerator_name ├── v_field_incubator_accelerator_number_shares ├── v_field_incubator_accelerator_shares_percent ├── v_field_use_share_class_other_than_common_for_incubator_accelerator_shares_applicability │ └── v_field_incubator_accelerator_share_class ├── v_field_else └── v_field_end v_field_table_row_end v_field_investor_number_shares v_field_investor_shares_percent v_field_total_number_shares v_field_investor_number_shares v_field_original_issue_price_precise_dollar_per_share v_field_post_money_dollar_valuation v_field_maximum_offering_dollar_amount v_field_minimum_offering_dollar_amount v_field_custom_board_terms_applicability ├── v_field_board_number_seats ├── v_field_board_member_hashes_each │ ├── v_field_board_member_hashed_name │ ├── v_field_board_member_hashed_series_of_stock_representing │ ├── v_field_board_member_hashed_include_sunset_on_right_applicability │ ├── v_field_end │ └── v_field_semicolon_conjunctive └── v_field_end v_field_else ├── v_field_founder_name_1 ├── v_field_founder_name_2 └── v_field_investor_rep_name v_field_end v_field_custom_qualified_financing_threshold_applicability └── v_field_custom_qualified_financing_dollar_threshold v_field_else v_field_end v_field_custom_additional_terms_applicability  └── v_field_custom_additional_terms_language_no_period v_field_end  v_field_include_signature_blocks_applicability  ├── v_field_company_name_upcase ├── v_sig_company_chained_titled  ├── v_field_else  │ ├── v_field_company_signer_name │ └── v_field_company_signer_title ├── v_field_end  ├── v_sigs_investors  │ ├── v_sig_investor_chained_titled  │ │ └── v_sigs_investors_hashed_name_upcase │ ├── v_field_else  │ └── v_field_end  └── v_sigs_end  v_field_end 
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Description
Series AA Preferred Stock Financing Term Sheet - TechStars.org open-sourced forms available at http://www.techstars.com/docs/
Notes
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Disclaimer
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INSTRUCTIONS:

1. Please consult your professional advisors.