This template is provided for general informational purposes only and does not constitute legal advice or a substitute for advice from a qualified lawyer. This document is based on a template originally authored by Penn Carey Law School and is used here with attribution, subject to its original terms of use.
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The following is a summary of the principal terms with respect to the proposed seed round preferred stock financing of Loading..., a Loading... Loading... (the “Company”). This summary of terms does not constitute a legally binding obligation. The parties intend to enter into a legally binding obligation only pursuant to definitive agreements to be negotiated and executed by the parties.
Type of Security to Issue
Shares of Seed Preferred Stock of the Company (the “Series Seed”).
Amount of Investment
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Purchasers
List all accredited and institutional investors approved by the Company] (the “Purchasers”).
Price per Share
Price per share (the "Original Issue Price"), based on pre-money valuation of Loading..., including an available option pool of Loading....
Liquidation Preference
[A multiple of] the Original Issue Price plus declared but unpaid dividends on each share of Series Seed. A merger, reorganization, or similar transaction will be treated as a liquidation.
Conversion
Convertible into one share of common stock in the Company (subject to proportional adjustments for stock splits, stock dividends and the like) at any time at the option of the holder.
Voting Rights
Votes together with the common stock on all matters on an as-converted basis. Approval of a majority of the preferred stock required to:
adversely change rights of the preferred stock;
change the authorized number of shares;
authorize a new series of preferred stock having rights senior to or or on parity with the preferred stock;
redeem or repurchase any shares (other than pursuant to employee or consultant agreements);
declare or pay any dividend;
change the number of directors; or
liquidate or dissolve, including any change of control.
Participation Rights
Purchasers who have invested $[__________] or more, will have the right to participate on a pro rata basis in subsequent issuances of equity securities.
Future Rights
The Series Seed will be entitled to terms and rights that are at least as favorable as those accorded to new issuances of preferred stock in subsequent rounds of financing (with appropriate adjustments for economic terms).
Confidentiality
The term sheet is confidential and may not be used to facilitate negotiations with third parties.
COMPANY
PURCHASERS