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This limited-seat luncheon brings some of Boston’s most experienced attorneys to provide two hours of deep instruction to entrepreneurs struggling to understand the complexity of high growth investments. Sample terms sheets will be provided and analyzed. Working lunch programs are hosted by TCN’s professional service sponsors to provide tactical level information designed to accelerate the fundraising process. Experts: Will Perkins – Bingham McCutchen Jason Rodriguez – Bingham McCutchen Siena Colegrave – Bingham McCutchen
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Understanding Angel and Venture Term Sheets:
William Perkins, Partner
Jason Rodriguez, Counsel
Siena Colegrave, Associate
September 11, 2014
A Play in Three Acts
CAST & SETTING
CAST
Entrepreneurs....................................Jason Rodriguez; Siena ColegraveJason, an engineer by training, spent many years in the labs of a large technology company. He is now leading a group of his former work colleagues, along with his co-founder Siena, into a new tech start-up. Having spotted the growing interest in electric cars, Jason and his team have developed a product that sits between the power source (i.e., wall plug) and the car charging port that speeds charge times by 30%-50% (in early lab tests of a crude prototype). SpeedyCharge needs $500-750,000 to develop a beta version of the product and place it with a local electric car club who have signed on to beta test it.
Angel Investor........................................................................ Will PerkinsWill, a lawyer by training, now spends his time investing in early-stage growth companies as an angel and, together with his group of old friends, functions almost as an angel fund.
SETTINGHaving been introduced through a mutual connection, Jason and Will are meeting in person for the first time at a local craft beer hall to discuss and negotiate terms for an angel investment round led by Will. Prior to this meeting, Jason and Will had a long “meeting” via teleconference where Jason walked Will through SpeedyCharge’s pitch deck and his business model. Will showed a willingness to invest, but Will wanted to meet in person to negotiate terms.
ACT I
Will and Jason meet at The Beer Hall and jump right into their negotiation. Things quickly turn to valuation...
Key Terms• LLC ❒• Corporation ❒• Founders ❒• Valuation ❒• Cap table ❒• Pre-money ❒• Post-money ❒• Convertible notes ❒• Preferred stock ❒• Priced round ❒• Conversion cap ❒
ACT II
With valuation and structure settled, Will and Jason turn to other key terms and topics...
Key Terms• Option Pool ❒• Vesting ❒• Pre-emptive rights ❒• Blocking rights ❒• Protective provisions ❒• Board seat ❒• Observer ❒
ACT III
Things are wrapping up...
Key Terms• Information rights ❒• Timing ❒• Drafting ❒• Counsel ❒• Expenses ❒
ACT IV
What didn’t come up...
Key Terms• Dividends ❒• Participating ❒
preferred • Anti-dilution ❒• Weighted-average ❒• Registration rights ❒• Full ratchet ❒• ROFR ❒• Co-sale ❒• Drag ❒
Other Resources
• The National Venture Capital Association’s “‘template’ set of model legal documents for venture capital investments” are available at:
http://www.nvca.org
• Series Seed documents are designed to simply seed rounds and are almost “venture-lite” documents. They are available at:
http://www.seriesseed.com
• The model documents, while instructive and prepared with some helpful annotations, are no substitute for a thorough discussion/translation by your
own counsel
Bingham Offices
Why Bingham for Emerging Growth Companies?• Recognized as having a National Tier 1 Venture Capital Practice
for 2014 by Best Lawyers/U.S News and World Report• Regularly refer prospective investment opportunities to our venture
capital clients and contacts• International funds experience• Clients rely on us not only for legal advice but also for a
reasonable, practical approach • Extensive corporate and operational experience • We bring the “A Team” • No “bait and switch”• Focus on value added, cost-effective services
• Bingham has extensive experience representing early stage companies in:• Formation• Financing• Licensing and technology transfer• Patent strategy and prosecution• Commercial contracts• Equity plans
• We also represent venture capital funds in:• Organizational matters
• Negotiating and documenting their investments in portfolio companies
• Representing clients in multiple rounds of preferred stock and other financings
• Investing in “seed” stage, mid-stage and later-stage companies
Why Bingham for Emerging Growth Companies?
Representative Venture and Emerging Growth Company Clients
Representative Large Tech Clients
William S. Perkins
Partner
617-951-8574
Thank You
and
Call us! We genuinely love these topics and are
always happy to brainstorm and answer questions.
Jason Rodriguez
Counsel
617-951-8182
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