Launch - Summer 2008 - (Page 32)

Making Sense By Chris Anderson Chris Anderson is a partner at the law firm of Ballard Spahr Andrews & Ingersoll. He is in the Business and Finance Department and is also a member of the Technology and Emerging Companies Group, Mergers and Acquisitions Group, Securities Group, Private Equity Group and International Group. He practices primarily in the areas of business, securities and international law. of Venture Term Sheets If you are soliciting or hoping to receive a term sheet from a venture capitalist or angel investor, or expect to discuss with potential investors the terms on which they might make an equity investment in your development stage company, prepare yourself. Investors use a lot of terms that may be unfamiliar to you. A little homework will help you speak and understand the lingo, and to know which terms are likely to have the most significant impact on the founding stockholders and their investments. The following is a simplified key to understanding a few of the new terms that might start swirling around you as you look to raise needed equity capital. Common Stock vs. Preferred Stock Common Stock is the basic ownership unit in a corporation. The holders typically have voting rights, and the right to receive the net assets of the corporation upon dissolution, subject to any preferential rights granted to holders of Preferred Stock. Preferred Stock consists of a group of shares that are given 32 launch summer 08

Table of Contents Feed for the Digital Edition of Launch - Summer 2008

Launch - Summer 2008 Contents Editor's Note Dashboard Marketing Column Funding Column Sales Column Risks vs. Rewards Myths of Entrepreneurship Opportunities vs. Ideas Funding Options for Startups Making Sense of Term Sheets

Launch - Summer 2008

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