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?
Answer: As I have previously discussed, in order to obtain negotiating leverage in any transaction, including a VC financing, you need to create a competitive environment (or the perception of one).
To read the full, original article click on this link: Demystifying the language of VC term sheets | VentureBeat
Author: Scott Edward Walker
