Term Sheets Flashcards
1
Q
Rich vs King
A
Rich entrepreneur concentred about wealth, King entrepreneur concerned about control over enterprise.
2
Q
What terms do Rich Entrepreneurs care about the most?
A
Price/Valuation Option Pool Liquidation Preference Anti-Dilution Dividend (In Order of importance)
3
Q
What terms do King Entrepreneurs care about the most?
A
Board Composition Protective Provisions Drag Along Rights Price/Valuation Option Pool Anti-Dilution (In Order of importance)
4
Q
Drag-along rights
A
Determines who has preference in determining the sale of a company.
5
Q
Protective Provisions
A
Covenants, restrictions, or extra voting rights on issues and concerns important to the investor.
6
Q
Anti-Dilution
A
The mechanism investors will use to minimize the diluting effect of subsequent rounds of financing.
7
Q
Option Pool
A
Stock options reserved for future employees, based on pre-money valuation of shares.
