Fundraising · Startup Funding

How to expedite a term sheet with an interested investor?

Anonymous

March 21st, 2017

A decision maker at a very small early stage VC has expressed high interest in investing the full seed round for my venture at the terms I'm comfortable with. We're also in discussions with two family offices who I believe are waiting for a seed stage investor to commit first.


How do I get the early stage VC to offer a term sheet? How quickly can I expect this to be offered? What incentive can I provide them if they're the only interested party for the seed investment? How can I convince them that I won't use their term sheet to shop around for better terms? Should I mention the later stage investors?

Joseph Roos

March 22nd, 2017

This is very much the art of the deal that comes with experience. In your case, given the limited information you provided, I would proceed as follows: 1) Disclose the fact that there are other interested parties around the table (FOMO alone can often help expedite a deal) 2) Offer to submit to them your own term sheet based upon the high level terms you have collectively agreed upon and allow them to revise/redline that document 3) If they have the capacity to take down the whole round offer them an exclusivity period upon them signing a term sheet subject to final due diligence Good luck.

Bart van Maarseveen I help to innovate, position, market, sell & coach

March 22nd, 2017

It could be an idea to ask them what they expect of their funding and how and with what results they want to exit. Then you do the maths wether it is feasible or not. Think of exits for al scenario's, it's not always crescendo in business.


If their expectations are in line with your plans, then terms are details which can be negotiated until everyone's happy..