Angel Term Sheet Evolution – Part 3 – Questions and Answers from the Bellingham Angel Members
Bellingham Angel Group Education Breakfast November 17, 2009 – Basil Peters and Dan Rosen
Highlights of Angel Term Sheet Evolution- Part 3:
- Should term sheets be binding?
- Regional differences in director compensation
- Building alignment on the exit
- Stand stills and exclusivity – do we need them?
- Is being on a board ever worth our time?
- Redemption rights and exits
- Vesting – best ways to implement? Tax considerations.
- Angels have been spoiling companies by undercharging
- Terms that create ‘exit push’ and ‘exit pull’
- Protective provisions drive directors crazy
- Why VCs don’t care about director compensation
- How the lawyers have reacted to this term sheet
- Balancing good governance and protective provisions
- Lead investors should help entrepreneur budget for the board
- Negotiating terms with entrepreneurs early in the process
- Board compensation going up faster than other compensation
- Why all directors should make a meaningful investment
- Angels and VCs – Seattle and Silicon Valley
- Board comp approx equal to CEO total comp – mix may differ
- Subject matter experts rarely make the best directors
- The importance of valuation
Part 4 of this video includes the rest of the questions and answers.
Part 4 of this video is the rest of the Q and A.