Green Shoots update…
How to nail a term sheet negotiation?
After all the work in creating an investable business, glossing up a deck, pitching to anyone who will listen (as well as whoever they can introduce you to), and finally, the day has come. A term sheet lands in your inbox… now what?
Bill Cogan is the Founder of Seven Legal, a legal consultancy focused on the pain points entrepreneurs encounter going from Seed to Series B when template documents and platforms give way to more complicated legal negotiations.
“Access to legal advice is changing with new business models, technologies, and a focus on the customer journey for clients. We want to be at the forefront of those changes for our clients and our lawyers.”
Bill set up Seven Legal to give entrepreneurs access to top-tier advice delivered from a lean operational infrastructure meaning founders gain access to high quality, stage-specific advice without burning through their hard-earned capital. Bill was joined by his colleague Pippa Watmough the polymath Home Grown Ambassador, entrepreneur, and lawyer.
Most entrepreneurs did not start their business with a background in negotiating against seasoned investors. As with any negotiation, it is crucial to have an awareness of both sides’ motivations, where incentives are aligned, and the points in the future where they may diverge.
From the entrepreneur’s perspective some bright-line rules are that you ideally want to get through each round with the ability to: (1) raise more funding; and (2) exit the business. Controls over either of these can be existential to your business or a liquidity event when an exit offer materialises. Investors will of course want to protect from excessive dilution and maximise their return on exit.
And so the dance begins…
Bill and Pippa walked through a term sheet, current market norms for VC fundraises, and highlighting where Founders can maximise their leverage on economic, control, and administrative issues. The workshop was followed up with a lively Q&A delivered at the Club as a welcome return to in-person events.
A one-stop-shop for entrepreneurs and investors. What really sets Home Grown apart is their members’ events which provide access to valuable insights and support scaling founders on their growth journey.Richard Farleigh, Entrepreneur and Former BBC Dragon's Den
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What a special delight and home from home! I stay here whenever I come to London and their Scale-up events are on the money.John Courtney
We are all crying out for opportunities to bump into other people, to spark ideas off them that make us happier, more fulfilled and more imaginative: Home Grown is a forum for just this creative serendipity.Tas Tasgal
Home Grown is more to me than just my office in London. It’s a community. It’s a place to network with other business people. But most of all it’s got that super friendly and positive vibe that you just can’t wait to get there each time.Neil Thompson