The Entrepreneurs Guide - What goes on in the dark spaces between the light
Thursday, February 15, 2007
Term Sheet Terms: On Good Terms
We've been actively fund raising again, so I think it's time to revisit some of the terms you will encounter in term sheets. Term sheet terms are largely market driven and reflect the availability of capital during the time you raise funds. If you're raising money in a pullback environment (like I did back in 2001-2002) time frame the terms are going to be fairly conservative and not very friendly to existing share holders. If there are a lot of investments being made, then money supply exceeds demand creating competition for deals and friendly terms to existing share holders. I think we've swung back to somewhere in the middle from the lean times of my last company and so, happily, terms are looking better these days.