Ten3

Business e-Coach: Yourself   Your Business    Management    Innovation    Venture Financing    Tech Transfer    Green Productivity

Home    Search    Site Map    Slide Shows    MBS    Case Studies    Model Agreements    Links    Contact us

 

Venture Financing

Typical Terms of Preferred Stock Issued to Venture Capitalists

  • Types of security and number of shares issued, price per share

  • Conversion price: number of common shares per preferred share

  • Additional formulas

  • Registration rights: demand rights; "piggyback"; registration expenses; transfer of rights

  • Use of proceeds

  • Right of first offer to purchase of new securities

  • Stock restriction agreements

  • Reserved shares

  • Non-competition agreement

  • Veto rights: next financings, acquisitions, mergers

  • Veto rights:

- Sale and other disposition of assets

- Dividends

- Amount of stock issued

- Borrowing and leasing

- Compensation of executive employee staff

- Ownership, sale or access of technology

  • Rights of inspection

  • Right to elect board members, attend board meetings

  • Vesting rights of employees

  • Receipt of financial statements

  • Closing expenses

See also:

How To Structure Your Deal

Sample Term Sheet for Private Placement of Convertible Preferred Stock

Private Placement Stock Purchase: Terms and Conditions for Securities Offering

Rambler's Top100