I’ll be leading the Day 1 Start-up Mini Track session titled “Hacking Term Sheets” at the upcoming Accelerate 2010 event. This is my pre-amble to the session, in the hopes of drumming up some interest and attracting an interesting crowd, and facilitate sharing and learning amongst all. My thanks goes to Jiin Joo and Sean Bonner, for thinking of me – I’m honored.
Understanding, negotiating and achieving consensus on term sheets can be an especially daunting and stressful task for entrepreneurs, who unlike VCs, don’t do this for a living. To make matters worse, other than the tiny fraction of serial entrepreneurs who’ve had the experience of fund-raising from VCs, most entrepreneurs negotiate against VCs for their first institutional round of funding when they have the least experience, but need the money the most.
I‘ve worked on no more than 20 term sheets since I began my career as an Investment Manager at Venture Capital firms slightly over 3 years ago – most in early/growth financing rounds, and once for a pre-IPO deal – peanuts really, if we go by the standards of most VCs (who issue 2 to 3 term sheets a month). That’s why I really consider myself a novice amongst my peers, and while being grateful for having the chance to share my knowledge, hope to also stand on the shoulder of giants and also tap on the collective wisdom of luminaries such as Brad Feld. If you haven’t, do spend some time reading through Brad’s articles, so that you can come to my session brimming with questions and hopefully contribute to the discussion. If you’re an entrepreneur who’s had some experience fund-raising from investors, I strongly urge you to attend as well, and share your stories with us so we can all learn together.
Hacking Term Sheets
Understanding, negotiating and achieving consensus on term sheets can be an especially daunting and stressful task for entrepreneurs, who unlike VCs, don’t have to do it for a living. Join James Chan, Investment Manager at Neoteny Labs, for a discussion on the economics and control of term sheet clauses, investor-entrepreneur dynamics and how best to work alongside and across lawyers, as he draws on his experiences at Infocomm Investments, Walden International and Neoteny Labs, as well as resources by luminaries such as Brad Feld and Joi Ito. Audience participation is expected.
Here’s the preliminary session plan I had in mind:
- An Introduction to Term Sheets
- The Cents and Sense of Term Sheets
- Control, alternate, delete!
- Investor-entrepreneur dynamics
- Keep your enemies close, but keep your lawyers closest!
- Q&A, Discussion
I hope to see each and every one of you at my session soon!