What Is an Annotated Venture Capital Term Sheet?

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Basic Business Information in Term sheet

1. Name of the company, address, webpage, email account, and contact details for the leadership team. 2. Use this section to give the reader an overview of your business. 3. Make sure to include as much detail as possible so that investors can clearly understand what your company is about.

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Preferred Stock, Non-Voting Stock

1. Non-voting stock is a share of equities that do not give the shareholder right to vote. 2. This is usually given to investors to sweeten the deal and entice them to invest in the company. 3. This type of stock is often given to early investors in a company to incentivize them to continue investing in the company.

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Participation in Rounds by Future Investors

1.  Termination Option 2. Piggyback Option 3. Right of First Refusal 4. Drag Along right 5. Liquidation Preference

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