Course Overview
Building a company requires working capital; it is the life blood of any company. One other way of raising working capital is through the sale of shares in the company to investors. When investors make an initial offer to buy shares in the company, the convention is that the investors offer a Term Sheet to the company, specifying the terms under which they will agree to invest. Investors will also qualify their ‘offer to invest’ by placing a time limit on the company’s decision; “this offer is open for acceptance until 5pm Friday 12th” etc.
Founders and business leaders then have a very short period of time, typically 5-7 working days, to analyse and then decide whether to accept or decline or to negotiate the offer based on the information in the Term Sheet. They may never have seen a Term Sheet before. They may not understand the detail and the consequences inferred in some of the terms and clauses. And the clock is ticking. In these circumstances it is critical that the people making the decision are well informed. This course will make you better informed.
The course walks you through every aspect of a Term Sheet. It’s a recent and a very detailed Term Sheet. By the end of this course you will understand what you’re signing. At various points we will review some of the ‘arguments’ that will be used by investors to ‘persuade’ you to agree to their Term Sheet. We suggest what you could and should negotiate, and what terms founders might aim for to get to a deal.
Term Sheets lead to Investment Agreements, which are binding contracts which will include warrants and liabilities. Promises and consequences. Consequences that could have serious impact on you personally and professionally. Consequently, you must always take professional advice when considering a Term Sheet or an Investment Agreement or a Loan Agreement or any other significant financial or corporate transaction. Whilst this course will educate and inform you, this course does not constitute professional advice. You must not rely on the content of this course when making those decisions. Appoint professional advisors. Get a lawyer.
The course comprises two sessions, the first of 45min duration and the second 25min long. Each session includes an AV presentation, with a full-featured media-player, presentation deck, textbook, case studies including example Warrants and Covenants, as well as tools and spreadsheets that users can download and use to analyse their own business. This course requires you bring a clean note book or notepad, several pens or pencils and space to think.
