What would this term sheet look like

[just4j...@gmail.com]

What is the normal range of a finding fee for a seed round funding of 2 million?

And how would the fee be divided between equity n cash? What are some of the KPIs required n what would term sheet look like?

Thanks to all.

[Hugh Mason]

On Monday, 25 May 2015 09:50:10 UTC+8, just4j...@gmail.com wrote:

What is the normal range of a finding fee for a seed round funding of 2 million?

3-6%

And how would the fee be divided between equity n cash?

A lot of folk would want cash, but it's up for negotiation

 

What are some of the KPIs required n what would term sheet look like?

Probably depends on what both parties want out of the situation. Putting a time limit on the raise would be a good idea. Maybe there's an incentive for a quick close, or on the investment coming in a form that matches certain criteria that the investee stipulates.

Making the remuneration, however it takes place, contingent on money actually arriving in your bank account would be good too because deals do get signed and then the cheque never appears sometimes!

[drllau]

> And how would the fee be divided between equity n cash? 

note there may be tax-implications .... as an IP broker (also covering IP-backed loans) I'm required to be registered as financial advisor in some jurisdictions, so granting equity may be complicated down the track because it should be equivalent to getting paid (for service), deducting tax on the net after costs (intro-fee, travel, hotels, meeting rooms, lawyer services for changing term sheet & compliance, registering agreement if security needed), then purchasing the startup shares at current valuation (or discounted if want to adjust for taxes). 

Also depending on jurisdiction I'd check out a decent securities lawyer because institutions such as SEC take a very dim view of fly-by-night procurers. 

Lawrence

http://www.linkedin.com/in/drllau

On Monday, 25 May 2015 09:50:10 UTC+8, just4j...@gmail.com wrote: