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Daniel Eberhard

CEO, Koho

Hi FD'rs. 

My colleague and I are currently in early stage term sheet discussions around a seed round. There is promising interest from a number of parties. I wanted to get your insights on term structures. Our goal is just to create a fair relationship between the parties. I pinched a few clauses from a sheet we expect to see. Any insights around some or all of these clauses are appreciated. Thank you 

Requires a majority of non-management shareholders. Our company has 2 co-founders, indicating 3 non management shareholders.  

Founding partner vesting structures - I have heard of these in VC term sheets but in a modest equity seed round, is it standard to strip founders of equity and build out on a 4 year cliff? 

Shares transferable to any type of future share issued at a 1:1 level?

In the event that future shares are issued at a lower price, additional shares will be issued at no cost to investors so their average cost per share is the same as the current round. 

Investing body may require that company engage 'investing body' management services. 

Permanent put option (at specified terms). 

It's worth mentioned we have bootstrapped thus far. We can continue to do so but want to target some aggressive growth strategies and a seed round will be required to do so. Thanks again. 
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