seed, term-sheetI am raising seed from an Advisors.
He is more a “Friend and Family” than an “unknown greedy VC of doom”
I am wondering what are the key differences between the YC Safe term sheet and the Series Seed - Stock Investment Agreement
In my particular case, we have already agreed on a number of shares, and I don’t need to give too many special rights. I am really looking for a founder friendly term sheet.
I live in (and love) Hong Kong, but we’ll incorporate in Delaware
I think a real point to point comparison might be useful to more people than specific advices in my case.
In your answer please state if you are an entrepreneur or VC
From my own research, here is what I found :
To clarify, there is no question that as an entrepreneur you would prefer uncapped convertible debt to equity. As Josh and many others point out, this is typically not a fair deal for the investors and many investors won’t do it, or will only do it for people that they are blindly in love with.
A good alternative for a seed round is to use convertible debt instead, it will allow to defer the decision on valuation to the series A. With the convertible note it is also typical to have a discount of 10-30% for the initial seed investors.
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