Funding Mechanics and Deal Structure Websites & Articles

Anatomy of a Term Sheet

Venture Capital: An overview of trends, strategies, and structural issues. Note that this is a little dated – see the “Term Sheet for First Round Venture Capital” below for something a little more recent, although less detailed.

Convertible Debt vs. Equity: Which Is Right for Your Startup?

“Whether you are an entrepreneur or an angel investor, the topic of convertible note vs. equity impacts you. For the most part, startups favor convertible notes and angels prefer equity, but which one is the right choice for your startup?”

High Tech Startup Valuation Estimator

Wondering what your pre-money valuation will be if a VC ever puts a term sheet on the table? Answer the following questions, and we’ll calculate an approximate range for you. Of course, every situation is different, so your mileage may vary.

Is convertible debt with a price cap really the best financing structure?

More nuanced considerations when choosing between convertible debt and priced equity for early stage financing. This article has many links to views from other thinkers in the field.

NVCA’s Model VC Financing Documents

Templates put together by a group of leading venture capital attorneys. The model venture capital financing documents consist of: Term Sheet Stock Purchase Agreement Certificate Of Incorporation Investor Rights Agreement Voting Agreement Right of First Refusal and Co-Sale Agreement Management Rights Letter Indemnification Agreement Model Legal Opinion

Sample Angel Investor Term Sheet

Preferred stock private placement term sheet used by Silicon Valley’s Band of Angels.

Sample Bridge Loan Promissory Note

Sample (and simple) promissory note sample used by Silicon Valley’s Band of Angels.

SBIC Financing, Step-by-Step

This article explains the Funding Mechanics and Deal Structure of pursuing SBIC money. SBIC’s are private venture capital firms licensed by the Small Business Administration.

Term Sheet for First Round Venture Capital

This article describes, and links to, a model entrepreneur-friendly term sheet. One of the goals is to reduce the amount of time and money that goes into term sheet negotiations. The article briefly describes the rationale for eliminating participation with preferred stock, imposing a 1x liquidation preference, and enacting a single trigger vesting acceleration upon acquisition.

Term Sheet Generator

The Silicon Valley law firm of Wilson Sonsini Goodrich & Rosati has developed an online term sheet generator. “This tool will generate a venture financing term sheet based on your responses to an online questionnaire. It also has an informational component, with basic tutorials and annotations on financing terms. This term sheet generator is a modified version of a tool that we use internally, which comprises one part of a suite of document automation tools that we use to generate start-up and venture financing-related documents.”

Term Sheet Hacks: Get a Great Deal

“Your investors can take their time, they have years to invest their money. Buy you’re under pressure from your employees and co-founders to deliver the money that will keep your company alive. The clock is ticking!

The True Costs of Raising Money

“You probably don’t have a clue what it really costs to raise the capital you need to fund your business. This expert spells it out for you.”

Thoughts on Convertible Notes

Describes some nuanced but important considerations when choosing to fund via convertible notes vs. priced equity.

Understanding Convertible Loans

“Before you borrow funds with a convertible loan, make sure it’s a positive move for the future of your business.”

Understanding the Financing Stages

“From seed stage to mezzanine, a breakdown of the key financing terms and what Funding Mechanics and Deal Structure mean to you.”


Disclaimer: Inclusion in this directory does not constitute an endorsement. The materials linked to from this page are copyrighted to their respective owners.