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Sample Term Sheet
If the venture capitalists are interested, they will very quickly come up with a draft term sheet for you which gives an overview of the conditions under which they would make an investment in your company. (see next page for a sample term sheet).

Other equity securities Related Articles

Equity Financing
Most small or growth-stage businesses use equity financing in a limited way. As with debt financing, most of the time additional equity comes from non-professional investors such as friends, relatives, employees, customers or industry colleagues.
Private Equity Lessons for the Startup or Entrepreneurial Company
The November issue of the Harvard Business Review poses a tough question to the management of public companies: “What If Private Equity Sized Up Your Business?” The question comes on the heals of recent revelations that public companies are facing increased scrutiny by Private Equity funds both favorably as, for example, an acquisition target or adversely, as a mismanaged and underperforming asset in need of reform. The article goes on to identify five trends that develop when Private equity gets involved. The purpose of this article is to highlight the premises upon which these five trends are based. Understanding this premise will lend valuable insight and strategic fodder for Start-up or Entrepreneurial companies as well as seasoned businesses.

Start-up Financing & Equity: What is Dilution?
Equity dilution reapportions a stockholder’s percentage of equity (stock) in a company. Here’s a scenario to demonstrate how equity dilution works.
How to think out of the box regarding Equity
Equity is expensive and investors want to buy assets for 10 to 30 cents on the dollar. There are a number of different sources for equity that can be accessed.

Brokers, Dealers, Private Lenders, and Venture Capital
A broker is defined as anyone who makes securities transactions for others. (The exception to this is a bank.) A dealer is defined as someone who buys and sells securities for their own account, through a broker or otherwise. Most entrepreneurs are looking for start-up capital and for someone else to raise capital for them on a straight commission, with no up-front fees. Only registered broker dealers, and Bona Fide employees, can legally solicit/sell securities for a company on straight commission, with no up-front fees. They always charge an up-front retainer, sometimes called due-diligence fees, before commencing. This fluctuates depending on the complexity of the transactions. Most brokers/dealers avoid startup and early stage companies. A Bona Fide employee cannot be paid commission from the sale of securities.
China is No Longer an Emerging Economy!
As I woke Monday morning I saw that the Asian markets, particularly the Shanghai Composite, were selling off sharply. And I thought to myself, “oh no, here we go”. My general feeling is that the US equity market is overbought as the valuations haven’t quite caught up to price. Yet the US equity markets finished the day positive. What gives?
How to Determine Your Business Success with Financial Ratio
If you’ve ever wondered how well your business is doing - truly doing - one way to clear up the mystery is to use financial ratios. Financial ratios are used by accountants and bankers to evaluate everything from your current income ratio, to debts, to inventory, and even your return on sales or capital investments. A lower ratio means a more severe problem. Another important assessment step in financial ratios is estimating your debt equity ratio. The debt equity ratio compares debt and equity and the two types of capitalization.
Joint Venture Equity
Since institutional equity providers prefer larger deals, developers looking for $3 million in equity, for example, have a hard time getting their attention. But if an organization has the capacity to do seven deals a year, for instance, then the amount of equity inches up in the aggregate of $20 million to $30 million over 12 months, and it hits the threshold where it makes sense.
The Importance of Due Diligence When You Buy a Franchise
Due diligence, which is originally coined in reference to the Securities Act of 1993 of the United States, is a legal term that has taken a more legal meaning for the last seventy years. After the stock market crash of 1929, brokers were obliged to follow detailed steps before they can sell securities such as bonds and stocks to investors. Among the causes of the Great Depression was the lack of proper control on Wall Street but now, a lot of things have changed.
Money Speaks - Bankers Jargon! Doesn't anyone speak English?
In simple terms, debt to equity explains the financial health of the company. For example; suppose your company has a debt to equity ratio of 4 to 1. To a banker, that means there is $4.00 in debt compared to $1.00 invested in the company. In other words, your lenders own more of your company than you do. So, if you were asked to lend money to your company at this type of ratio, would you?
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