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Mommy Millionaire

"Everything begins with a search for something better--a dream, an idea, the courage to face a challenge, and the passion to get it done. You can do it. Believe in yourself. Change the rules. Join the revolution."

 From MOMMY MILLIONAIRE, by Kim Lavine

Read more in the newly updated Platinum Version of MOMMY MILLIONAIRE Available for immediate download by eBook or PDF. Filled with all kinds of bonus materials including document templates, updated tips and the real skinny on what went down since I wrote this book.

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Kim Lavine
Listen as I tell you a story, of history being made...

Kim is on a mission to inspire people to follow their dreams, empowering them with hope, honesty and faith.

Identified as America’s Expert on Inspirational Business Advice, Kim touches and inspires millions around the world through her appearances on The Today Show, Rachel Ray, Good Morning America, NBC & ABC news, CNN, CNBC, FOX, NPR, Oprah & Friends Radio Network, and features in USA Today, Country Living, Guideposts, Inc, Business Week, Entrepreneur, Women's World, and American Baby to name a few. Read More...

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Monday
Aug112014

What's a Term Sheet?

by Kim Lavine

Next a Term Sheet had to be drafted. I was confident and relieved to put the details of this enormous task in the hands of Smart Money, Symphony Money, who was a lawyer, and no less than two attorneys in his office. Smart Money wasn’t going to let just any attorney handle this. He wasn’t going to go to all the trouble of balancing volatile personalities and combustible financials to craft a deal equal to any work of art, and turn it over to a lawyer who would mess it up.

A Term Sheet is a document usually five to ten pages long summarizing essential terms and conditions of an investment opportunity.

Deal Docs to my first Angel Round. Believe it or not, they forgot the most important document which I used to get my company back.

Anatomy of a Term Sheet

Each one of these items will be addressed in a Term Sheet and specifically spell out all the details in a paragraph for each.

Type of Security

Are you selling stock in exchange for equity or looking for a loan in the form of a note?

Investors

What are the names of the investors who have agreed to the investment terms?

Amount Raised

How much money are you raising and on what terms in what time period?

Use of Proceeds

Details of how you are going to spend the money you are raising.

Closing

What are the conditions to closing, what day is it set for and where will it take place?

Capitalization

A 'Cap Table' is included showing how ownership in shares and or equity will break down with individual shareholders and investors post money.

Corporation

Will new corporation documents be issued, by whom and in what entity and state?

Term of Payment

How will you actually get the money? Will it be deposited into a bank account? Who has access to it and how do they access it?

Terms of Conversion

If you issued a warrant or note, how is an investor able to convert it or call it in for payment?

Warrant Coverage

What are the specifics of the warrant or note?

Security

What type of collateral or equity if any secures the loans or warrants?

Protective Provisions

how are investors protected or indemnified?

Board of Directors

Who's on the Board of Directors and what is their function?

Indemnification of Board of Directors

How are the people on the Board protected personally from business liabilities?

Management and Information Rights

Who is the Management Team and what rights do investors have to information and reporting?

Investor Participation Rights

How can investors participate (or not) in the general operation of the business?

Guaranty of Investors

How are investors guaranteeing their investment?

Proprietary Information, Inventions and Non-compete Agreements

How is Intellectual Property protected?

Exclusivity

How long do investors have to participate on exclusive terms on this investment?

Confidentiality

All parties guarantee to keep the names and details of all parties confidential under what terms?

Legal Fees and Expenses

Who is paying all the legal fees, which can average $60,000 for a standard closing?

Expiration

When does this Term Sheet expire?

 

An excerpt from MOMMY MILLIONAIRE

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