I lived through two major downturns. The first one led to personal bankruptcy, and I narrowly survived the second one. In 2001, I worked for a boutique strategy firm in the Bay Area focused on growth strategies for hi-tech companies. Despite being one of the best...
You did all the hard work in building your founding team, ideating to a problem to be solved, creating the minimum viable product (MVP), finding product market fit, and creating some version of a go-to-market recipe that can be scaled. All you now need is fuel to be...
Six years back, almost to the date, I drew a graph between CAC (Cost of Acquiring a Customer) and ACV (average Annual Contract Value) for SaaS companies. This was part of a presentation I made to the partnership at Helion to emphasize the point that ACV by itself is...
Imagine you sell a SaaS-based HR tool to enterprises. Your solution specifically targets employee engagement, integrates to varying degrees of effectiveness with existing full service HRMS systems, and has very distinct advantages as compared to two key competitors....
Alexa – Please repeat my standard grocery order OK Google – Play the latest Arijit Singh songs Siri – Is it raining in Mumbai today? Such commands have become a common part of our day to day life. But it doesn’t just stop here, we were far more...
The Company and the Founders shall complete an initial public offering or a ‘strategic sale’ within 5 years from the Closing Date (“Exit Date”) on terms that are acceptable to the Investor. The failure of Company and Founders to provide an exit by the Exit Date shall not relieve the Company / Founders of their obligations to provide an exit to the Investor, which shall continue until the Investor ceases to hold any shares. In case of failure to provide exit, the Investor shall inter-alia have a drag along right on all other shareholders of the Company.
Liquidation Preference
Higher of 1x or pro rata entitlement on an as-if converted basis in any liquidity event. Liquidity event shall be defined in the definitive documents and will inter alia include change in control or sale of substantially all of the assets of the Company.
Pre-Emptive Rights
The Investor shall, in any subsequent offering of securities by the Company, have a right to maintain their shareholding in the Company. [Note to Draft: Any super pro rata rights will be over and above this and should be included here]
Valuation
The valuation section concerns what an investor believes the company is worth. valuation issues addressed in the term sheet will include: pre-money valuation, post-money valuation, capitalization table and price per share.
