Remember a term sheet agreement is not a deal until the check clears. Entrepreneurs sometimes assume an initial agreement with an Angel is a commitment, so they start spending before any money is received. But due diligence and paperwork take time, and can change everything.
It’s true that Angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. However, there is no set pattern of terms an entrepreneur might be able to anticipate from either. Your best strategy is to bring your own term sheet to the negotiation as a starting point.
When a company is at its earliest seed stage, the terms tend to be the least complex. As the company grows and the second or third group of investors comes in, the terms of each subsequent financing grow in size, scope, and the number of lawyers’ fingerprints on them.
To read the full, original article click on this link: Startup Professionals Musings: Keep Term Sheets Simple for Quicker Cash to Spend
