Last Thursday, The IEE’s very own PantherlabWorks partnered with Innovation Works, Inc. to host an event that covered the basics of understanding a venture capitalist term sheet. Stephanie Schreiber of Buchanan Ingersoll & Rooney, PC and Gary Glausser of Innovation Works, Inc. guided attendees through a presentation that covered topics including:
- Liquidation preference
- Participation rights
- Cumulative dividends
- Conversion rates
- Antidilution provisions
- Protective provisions
- Founder share vesting
- Board composition
- Preemptive rights
- Redemption
- No-shop clauses
In addition, the speakers reviewed examples of term sheets and the legal issues surrounding the entire process in today’s market. A key takeaway from the event was the concept of reciprocated value. In other terms, you should be seeking investors that not only find value in your business and your ideas, but they should be able to provide you with a level of value in return. Term sheets are both an art and a science. For clarity or additional information regarding term sheets, investing, and venture capital please contact PantherlabWorks Director Jessica Sinclair at jsinclair@innovation.pitt.edu.