Term Sheets

News & Analysis as of

Creating and Maximizing Enforceable Settlements

Settling a case may be the culmination of years of litigation or a strategic move at the outset to avoid litigation costs. Many times, settlement occurs at some point in between. Regardless of when the settlement occurs, it’s...more

Grant of security – Not so secure anymore?

The recent High Court decision in Encus International Pte Ltd (in compulsory liquidation) v Tenacious Investment Pte Ltd & Ors [2016] SGHC 50 (Encus International) bears significance to lenders for two pivotal reasons. First,...more

An Emerging Trend in Early-Stage Company Financing? – After Years of Growing Ubiquity of Convertible Notes, a Return to Priced...

After years of increasing acceptance of and reliance on convertible note financings as a mechanism for funding early-stage companies, we have noted a clear emerging trend away from such transactions (and others like them,...more

Anatomy of a Term Sheet: Series A Financing (Q2 2016)

A key milestone in the lifecycle of many successful companies (and, admittedly, many unsuccessful companies) is obtaining financing from angel or venture capital investors, but in negotiating with experienced investors...more

In Case You Missed It: Launch Links - June 2016 #4

Some interesting links we found across the web this week: What Brexit Means for Tech Startups - Brexit news dominated headlines this week, so here’s a roundup from the startup perspective....more

Startup M&A: Why a Letter of Intent Deserves Your Full Attention

You might know it as a letter of intent or a term sheet. Maybe you’ve heard it referred to as an MOU, or memorandum of understanding. Whatever you call it, this document of about five pages is a summary of the terms of a deal...more

What’s in a VC Term Sheet?

You’ve just received your first venture capital term sheet. Congratulations—you’ve earned it. Now what does it all mean? “Pre-money valuation,” “liquidation preference,” “pro-rata participation rights”? A seasoned venture...more

Convertible Debt Term Sheets – What Companies Need to Know

Convertible debt is a type of financing companies frequently seek as a prelude to their first significant preferred equity financing, or as a bridge round between equity financings. A convertible debt round will typically...more

Blog: Agreements to Agree can be Broken: Negotiating Letters of Intent

On December 23, 2015, the Delaware Supreme Court held that SIGA Technologies, Inc. cannot avoid paying $113 million in expectation damages (plus interest) to PharmAthene, Inc. for breaching an express agreement to negotiate a...more

Term Sheets and the Reimbursement of Due Diligence Costs

In today’s fast-paced lending environment, lenders often are required to order third-party reports and engage outside counsel prior to completing formal underwriting and issuing loan commitments. A non-binding term sheet is...more

4 Ways to Protect Your Business During Exit Talks

There comes a time when just about every reasonably successful startup gets an exit opportunity. For founders, these moments are triumphant. You’ve dedicated years of your life to building something, and now somebody wants to...more

Term sheet may be legally binding

A recent High Court decision has considered the contractual status of a document described as a "term sheet" which related to an investment in a joint venture company....more

To PPM or not to PPM that is the Question for many Start-Ups

Many start-up companies know they want to raise angel capital, but do not know how to proceed. They really want to know: “do I need a 50 page Private Placement Memorandum to raise money?” The answer is: “It depends, but...more

Preferred Equity Financing Term Sheets – What Companies Need to Know

As a founder of a startup, receiving your first venture capital term sheet can be one of the most exciting times in the early life of your company. Knowing that potential investors believe in your team and your company enough...more

Georgia Supreme Court Answers “Yes”—A Guarantor May Waive Foreclosure Confirmation

In a decision issued on February 22, 2016, the Supreme Court of Georgia ruled that a guarantor can waive by contract the requirement for a lender to obtain confirmation of a foreclosure sale before pursuing the guarantor for...more

Caveat Emptor: Non-compliance with a Non-Binding Term Sheet Results in $195 Million Judgment

On December 23, 2015, the Delaware Supreme Court affirmed the Delaware Chancery Court’s award of $195 million to PharmAthene, Inc. (“PharmAthene”) as compensation for lost profits (a/k/a expectation damages) on account of the...more

Negotiating a Term Sheet? Entrepreneurs, Take Note

What do entrepreneurs need to know about term sheets in order to get a deal done? William Bernat: Term sheets are not “one size fits all.” Since most of a term sheet’s provisions are meant to protect the investors’...more

Anatomy of a Term Sheet: Series A Financing

A key milestone in the lifecycle of many successful companies (and, admittedly, many unsuccessful companies) is obtaining financing from angel or venture capital investors, but in negotiating with experienced investors...more

Watch Your LOIs and MOUs and “Agreements to Agree”

If you are working with a third party on a term sheet, letter of intent or memorandum of understanding (an “LOI”) on what you view as a non-binding basis, make sure to say so explicitly in the LOI. Businesses use LOIs...more

A Refresher on Term Sheets and Commitment Letters

Term sheets and commitment letters are documents frequently used by lenders to outline the terms of a potential financing. However, these two documents differ with respect to what is required of, and whether the terms are...more

MEasure - Summer 2015

Welcome to the Summer 2015 issue of measure, King & Spalding’s Middle East quarterly newsletter. This issue covers a number of areas with interesting developments and valuable guidance. Phillip Sacks and Jodi Norman discuss...more

A Duty to Negotiate in Good Faith - A New Lender Liability Claim in North Carolina?

North Carolina courts have long held that a lender does not owe a fiduciary duty to its borrowers. But what about a “Duty to Negotiate in Good Faith?" In a recent opinion (RREF BB Acquisitions, LLC v. MAS Properties, June 9,...more

Ready for Investment? What to Expect in a Typical Preferred Stock Term Sheet

If your company is ready for investment, congratulations! You've reached a milestone. Now you must ensure that both you and your investors have a documented understanding of the terms under which they will make a financial...more

Stock and Asset Sales: Preliminary Agreements

Prior posts discussed the basic advantages and disadvantages of structuring a sale of a business as a stock sale or an asset sale, as well as the initial considerations in agreeing to structure a sale as an asset purchase. ...more

Understanding An M&A Term Sheet

Congratulations! You just received an offer to acquire your company. A serious buyer will present you with a term sheet that covers the basic terms of the transaction. Do not make the mistake of agreeing to a term sheet...more

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