Startup Funding Espresso – How To Handle an Exploding Term Sheet

How To Handle an Exploding Term Sheet Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. An exploding term sheet is one that comes with a specific deadline, including a time of day and date. It often gives the founder very little time to make a decision. For founders receiving an exploding term sheet, consider the following: Most of the time, the investor will invest beyond the deadline. In many cases, the investor is very busy and needs to get things done. The deadline date is meant to progress things in a timely manner. In most cases, the deadline is not enforced. Term sheets are not legally binding. Even if signed, they are not binding until the subscription agreement is signed and the funds transferred. Before that, there is recourse to back out of the deal. Upon receiving an exploding terms sheet, consider what information needs to be discovered. Set up a plan to gather the information. Communicate that plan to the VC and ask for an extension if necessary. In most cases, the VC will appreciate there's a definitive timeline to a close and will agree to it. Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. Let's go startup something today. _________________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Investors check out: https://tencapital.group/investor-landing/ For Startups check out: https://tencapital.group/company-landing/ For eGuides check out: https://tencapital.group/education/ For upcoming Events, check out https://tencapital.group/events/ For Feedback please contact [email protected] Please follow, share, and leave a review. Music courtesy of Bensound.