As a follow up to the two-page plain English Seedrs Term Sheet we launched earlier this year, we now have a version of the document for convertible equity campaigns. We believe that raising capital should be transparent and simple – including nuanced fundraising structures like convertible equity.
The new plain English convertible equity crowdfunding term sheet from Seedrs contains a summary of the key legal terms.
Seedrs convertible investments use exactly the same nominee structure, and go through exactly the same due diligence process, as Seedrs equity investments. For more information on the structure and due diligence process, please see our Term Sheet for equity investments.
Because Seedrs convertibles are a different type of investment to standard Seedrs equity, the investment process and documentation are a bit different. Our convertible equity term sheet summarises the differences between convertible and “normal” equity investments and sets out the key terms of the documentation.
At Seedrs, we hold ourselves, our startups and our investors to very high standards because we want every company that raises funding on Seedrs to be set up with the best chances for success in the future. Achieving success for a startup often means being able to go on and raise follow-on funding from large angel syndicates or venture capital firms and eventually go on to a successful merger, acquisition, private equity investment or IPO.
The new plain English equity crowdfunding term sheet from Seedrs contains a summary of the key legal terms.
We’ve always set our legal standards at the level needed to be compatible with the rest of the startup funding ecosystem. This means putting in place very specific investor protections, contractual agreements and making sure that all the paperwork is in order.
People invest on Seedrs for many reasons. To support friends or family, because they love a particular business idea, or they just want to invest in a new asset class. But one thing that our investors have in common is that if the company they invest in is successful, they want to share in that success.
In traditional forms of financing, large professional investors will agree terms with a company to prevent their investment from being diluted when the company issues more shares, and to ensure they benefit from share sale opportunities. However, normally a small investor simply will not have the leverage to negotiate such terms.