41. Letter of Intent which investors sign before
Share Holder agreeement
LetsVenture has a standard term sheet
After term sheet signed, Share Holder
Agreement (SHA) is the legal document
signed
Shared issued to you, post money in bank
and SHA signing
What is a termsheet?
42. 1. Liquidation Preference (could tilt outcomes on exit)
Participating or Non Participating:
Non Participating (as per LV) – Investor gets to take
participate pro-rata.
Participating: Takes his money out and then
2. Anti dilution:
Taken money at x valuation. If there is a down round,
given to investors (full rachet) – broad based weighted
compensation.
3. Option Pool (on pre-money or post money?)
4. Board Composition
Look for 1 director,
1 observer (not recognized by Indian law) but a backup if
not be available
Understand the
details of a Term
Sheet
(some parameters could
impact the value of your
startup!)