Sample Term Sheets

These term sheets, like other content, are intended to help inform investors and entrepreneurs. It is not legal advice, and none of the content should be used verbatim or in any way without help from a lawyer. Our goal is to be comprehensive, so not all of the innovations we document are useful, and no innovation is always appropriate. You assumes responsibility for the consequences of using documents or information found on our website.

1.    Variable Dividend Redeemable Preferred Stock (the “Demand Dividend”)

This is useful when structuring a transaction with an equity like investment, including a timed exit feature. When using this structure, it is important to consult with a tax accountant/attorney

2.    Loan (Promissory Note) Financing from a Foundation with Impact-triggered Default

This is useful when considering an investment from a Foundation in the form of a debt instrument with a balloon payment at the end of the term. Note that this includes an impact-triggered default provision.

3.    Redeemable Equity (redemption obligation)

This is useful when considering an investment structured with a timed redemption obligation, making part of the investment debt like with a potential equity kicker provision.

4.    Royalty Payment Convertible Note

Useful when considering a debt-like investment with a potential equity kicker provision.

4.    Performance Aligned Stock

US Tax Efficient structure using stock redemption and dividends for alternative exist

5.  Recoverable Grant.  Blended finance structure that allows a grant to be repaid to the donor as a loan if certain milestones are met