When it comes to term sheets, Bill Payne, a member of Frontier Angel Fund and Vegas Valley Angels sees two trends: "Angel groups are much more likely to have adopted a standard term sheet as a starting point for negotiations," Payne says, "and angel groups are tending to reject convertible debt deals."
Standard term sheets create efficiency and reduce contention
"Some entrepreneurs come to their first angel meeting with either a template of a term sheet or one that their attorney has created," Payne says. "Angels will hand their term sheet back, and say, why don't you and your attorney work through our term sheet and see what issues you have? Then we'll negotiate from there."
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