Faculty.darden.virginia.edu/chaplinskys/PEPortal/Documents/The Early Stage Term Sheet.pdf. 5-minute primer on VC Term Sheets. FFI - Plain Preferred Term Sheet. Demystifying the language of VC term sheets. (Editor’s note: Scott Edward Walker is the founder and CEO of Walker Corporate Law Group, PLLC, a law firm specializing in the representation of entrepreneurs. He submitted this column to VentureBeat.) A reader asks: We just got a term sheet from a VC and we were hoping you could help us understand certain timing provisions.
In the last paragraph, there is language about the term sheet expiring “at 5:00pm on the day following the date hereof if not accepted by the company prior to such time.” Also, in a section called “No Shop” there is language that the company “shall not negotiate with or enter into any agreement with any other person … for a period of 90 days following the date hereof.” We’ve been talking to a bunch of VC’s and don’t want to lock ourselves in. Can we get these provisions deleted? No VC, however, wants to be a stalking horse. Let’s look at each of those in the context of your question. Exploding Term Sheets. My advice is to just ignore this paragraph.