TERM SHEET NEGOTIATION

The final stage of the process will be finalizing the terms of the deal. A topline discussion of valuation will have already occurred at the start of due diligence. The key components of the term sheet will be the amount of money to be raised and at what pre-money valuation that money will invest at. Generally, the New York Angels do deals in the range of $100,000 to $1.0 million and at pre-money valuations less than $5 million. The term sheet will contain other protective provisions common in angel investing and may include a board seat.

There is a good term sheet definition worksheet on the Angel Capital Association website (www.angelcapitalassociation.org).  Also, Wilson Sonsini (www.wsgr.com) has an interactive term sheet generator that makes understanding term sheets easy.