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Terms of Endearment:
Top 10 Things to Remember about
Term Sheets
January 21, 2014

Nutter McClennen & Fish LLP
Seaport West
155 Seaport Boulevard
Boston, Massachusetts 02210
Telephone 617.439.2000
www.nutter.com
Top 10 Things to Remember about Term Sheets

10. Control Rights vs. Economic Rights
9. Binding and Non-Binding Commitments
8.  Workable Protective Provisions
7.  Voting Rights – among investors and founders’
rights post-closing
6.  Liquidation Preference

Nutter McClennen & Fish LLP • www.nutter.com

2
Top 10 Things to Remember about Term Sheets

5. Anti-Dilution Protection
4. Founder Stock Terms – vesting and change of
control
3. Board Composition
2. The Trouble with High Valuations
1. Valuation and the Option Pool Shuffle

Nutter McClennen & Fish LLP • www.nutter.com

3
Adam B. Ghander, Esq.
Nutter McClennen & Fish LLP
155 Seaport Blvd.
Boston, Massachusetts 02210
email: aghander@nutter.com
office: 617-439-2991

Nutter McClennen & Fish LLP • www.nutter.com

4

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Top 10 term sheet terms - TCN Life Science Fast Track

  • 1. Terms of Endearment: Top 10 Things to Remember about Term Sheets January 21, 2014 Nutter McClennen & Fish LLP Seaport West 155 Seaport Boulevard Boston, Massachusetts 02210 Telephone 617.439.2000 www.nutter.com
  • 2. Top 10 Things to Remember about Term Sheets 10. Control Rights vs. Economic Rights 9. Binding and Non-Binding Commitments 8.  Workable Protective Provisions 7.  Voting Rights – among investors and founders’ rights post-closing 6.  Liquidation Preference Nutter McClennen & Fish LLP • www.nutter.com 2
  • 3. Top 10 Things to Remember about Term Sheets 5. Anti-Dilution Protection 4. Founder Stock Terms – vesting and change of control 3. Board Composition 2. The Trouble with High Valuations 1. Valuation and the Option Pool Shuffle Nutter McClennen & Fish LLP • www.nutter.com 3
  • 4. Adam B. Ghander, Esq. Nutter McClennen & Fish LLP 155 Seaport Blvd. Boston, Massachusetts 02210 email: aghander@nutter.com office: 617-439-2991 Nutter McClennen & Fish LLP • www.nutter.com 4