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Funding Term Sheet
"I need a Funding Term Sheet for a Series A investment round of US$10 million in my Hong Kong fintech company, to be completed by March 2025, with specific provisions for US and Singapore-based venture capital investors, including enhanced information rights and board representation."
1. Parties: Identification of the company, lead investor(s), and other participating investors
2. Background: Brief description of the company, purpose of the investment, and current fundraising round
3. Definitions: Key terms used throughout the term sheet
4. Investment Terms: Amount of investment, valuation, price per share, and investment structure
5. Closing Conditions: Conditions precedent to closing, including due diligence, board approval, and regulatory requirements
6. Use of Proceeds: Intended use of the investment funds
7. Investor Rights: Key rights including information rights, board representation, and protective provisions
8. Transfer Restrictions: Limitations on share transfers, right of first refusal, co-sale rights
9. Confidentiality: Confidentiality obligations regarding the term sheet and negotiations
10. Binding Effect: Clarification of which provisions are binding and non-binding
11. Exclusivity: Period during which the company cannot seek alternative investments
12. Expiration: Validity period of the term sheet
1. Convertible Terms: For convertible investments: conversion price, caps, discounts, and triggering events
2. Anti-dilution Protection: Include when sophisticated investors require protection against down rounds
3. Liquidation Preference: Terms for preferential returns in liquidation events, typically for Series A or later rounds
4. Participation Rights: Include for preferred shares with participation rights beyond liquidation preference
5. Dividend Rights: Include when specific dividend rights are part of the investment terms
6. Drag-Along Rights: Include in later-stage investments to force minority shareholders to join in company sale
7. Registration Rights: Include for US investors or when IPO is a likely exit route
8. Employee Share Option Pool: Include when new ESOP is being created or existing pool is being expanded
1. Cap Table: Pre and post-money capitalization table showing ownership structure
2. Key Terms Summary: Summary of key commercial terms in table format for quick reference
3. Milestone Schedule: If investment is tranched, details of milestones and corresponding investment amounts
4. Pre-Closing Checklist: List of required documents and actions to be completed before closing
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Software
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Finance
Corporate Development
Executive Leadership
Investment
Compliance
Company Secretarial
Board of Directors
Chief Executive Officer
Chief Financial Officer
Chief Legal Officer
Investment Director
Corporate Lawyer
Investment Manager
Venture Capital Partner
Private Equity Manager
Company Secretary
Corporate Development Manager
Finance Director
Legal Counsel
Investment Analyst
Compliance Officer
Board Director
Managing Partner
Founder
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