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| Foreword | |
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| Preface | |
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| Acknowledgments | |
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| Introduction: The Art of the Term Sheet | |
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| The Players | |
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| The Entrepreneur | |
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| The Venture Capitalist | |
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| The Angel Investor | |
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| The Syndicate | |
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| The Lawyer | |
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| The Mentor | |
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| How to Raise Money | |
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| Do or Do Not; There Is No Try | |
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| Determine How Much You Are Raising | |
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| Fund-Raising Materials | |
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| Due Diligence Materials | |
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| Finding the Right VC | |
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| Finding a Lead VC | |
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| How VCs Decide to Invest | |
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| Closing the Deal | |
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| Overview of the Term Sheet | |
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| The Key Concepts: Economics and Control | |
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| Economic Terms of the Term Sheet | |
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| Price | |
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| Liquidation Preference | |
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| Pay-to-Play | |
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| Vesting | |
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| Employee Pool | |
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| Antidilution | |
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| Control Terms of the Term Sheet | |
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| Board of Directors | |
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| Protective Provisions | |
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| Drag-Along Agreement | |
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| Conversion | |
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| Other Terms of the Term Sheet | |
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| Dividends | |
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| Redemption Rights | |
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| Conditions Precedent to Financing | |
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| Information Rights | |
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| Registration Rights | |
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| Right of First Refusal | |
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| Voting Rights | |
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| Restriction on Sales | |
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| Proprietary Information and Inventions Agreement | |
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| Co-Sale Agreement | |
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| Founders' Activities | |
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| Initial Public Offering Shares Purchase | |
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| No-Shop Agreement | |
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| Indemnification | |
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| Assignment | |
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| The Capitalization Table | |
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| Convertible Debt | |
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| Arguments For and Against Convertible Debt | |
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| The Discount | |
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| Valuation Caps | |
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| Interest Rate | |
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| Conversion Mechanics | |
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| Conversion in a Sale of the Company | |
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| Warrants | |
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| Other Terms | |
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| Early Stage versus Late Stage Dynamics | |
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| Can Convertible Debt Be Dangerous? | |
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| How Venture Capital Funds Work | |
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| Overview of a Typical Structure | |
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| How Firms Raise Money | |
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| How Venture Capitalists Make Money | |
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| How Time Impacts Fund Activity | |
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| Reserves | |
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| Cash Flow | |
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| Cross-Fund Investing | |
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| Departing Partners | |
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| Fiduciary Duties | |
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| Implications for the Entrepreneur | |
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| Negotiation Tactics | |
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| What Really Matters? | |
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| Preparing for the Negotiation | |
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| A Brief Introduction to Game Theory | |
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| Negotiating in the Game of Financings | |
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| Negotiating Styles and Approaches | |
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| Collaborative Negotiation versus Walk-Away Threats | |
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| Building Leverage and Getting to Yes | |
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| Things Not to Do | |
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| Great Lawyers versus Bad Lawyers versus No Lawyers | |
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| Can You Make a Bad Deal Better? | |
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| Raising Money the Right Way | |
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| Don't Ask for a Nondisclosure Agreement | |
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| Don't Email Carpet Bomb VCs | |
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| No Often Means No | |
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| Don't Ask for a Referral If You Get a No | |
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| Don't Be a Solo Founder | |
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| Don't Overemphasize Patents | |
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| Issues at Different Financing Stages | |
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| Seed Deals | |
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| Early Stage | |
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| Mid and Late Stages | |
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| Other Approaches to Early Stage Deals | |
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| Letters of Intent-The Other Term Sheet | |
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| Structure of a Deal | |
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| Asset Deal versus Stock Deal | |
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| Form of Consideration | |
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| Assumption of Stock Options | |
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| Representations, Warranties, and Indemnification | |
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| Escrow | |
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| Confidentiality/Nondisclosure Agreement | |
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| Employee Matters | |
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| Conditions to Close | |
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| The No-Shop Clause | |
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| Fees, Fees, and More Fees | |
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| Registration Rights | |
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| Shareholder Representatives | |
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| Legal Things Every Entrepreneur Should Know | |
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| Intellectual Property | |
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| Employment Issues | |
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| State of Incorporation | |
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| Accredited Investors | |
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| Filing an 83(b) Election | |
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| Section 409A Valuations | |
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| Authors' Note | |
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| Sample Term Sheet | |
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| Sample Letter of Intent | |
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| Additional Resources | |
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| Glossary | |
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| About the Authors | |
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| Index | |
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| Excerpt from Startup Communities | |