After a decision has been made about the funding of your company, things will get to be a little more serious. You'll start discussing the terms of the contract. During this section of negotiation you will be talking a lot about term sheets and letters of intent. The term sheet and letter of intent discuss many things, but the most important thing on both the investor and the entrepreneurs mind is the valuation.

Well, equity investment firms use many of the same valuation methods discussed in the Ad|venture venture capital guide. When you have a term sheet presented to you, you shouldn't expect a surprise. The term sheet will be issued to you after all of the due diligence of the investment company. A term sheet is similar to a letter of intent, but is usually only a fraction of the size. It's like a summary of the letter of intent.

The term sheet focuses on things such as.

1) What type and how many securities are being offered by the company

2) What the proceeds will be used for

3) Terms of the preferred stock

4) Transfer restrictions

5) Covenants

6) Miscellaneous

To order a sample term sheet and letter of intent go to our home page by clicking on the link below

Venture capital term sheet and letter of intent