Checklist Alternate Term Sheet Provisions

COMPANY LETTERHEAD

{{company_name}}

{{company_address}}

Phone: {{phone}}

Email: {{email}}

Website: {{website}}

Date:

{{date}}

Investment Amount and Valuation

1.1. **Pre-Money Valuation:** Is there an agreed pre-money valuation of {{pre_money_valuation_currency}}{{pre_money_valuation}}?

1.2. **Post-Money Valuation:** What is the resulting post-money valuation of {{post_money_valuation_currency}}{{post_money_valuation}}?

1.3. **Investment Amount:** What is the total investment amount contemplated: {{investment_amount_currency}}{{investment_amount}}?

1.4. **Conversion Discount:** Is there a discount for conversion of convertible notes? If so, what is the percentage: {{conversion_discount_percentage}}%?

Share Class and Rights

2.1. **Type of Shares:** Are the shares Preferred Shares or Ordinary Shares?

2.2. **Dividend Rights:** Are there any special dividend rights (e.g., cumulative, non-cumulative, participating)?

2.3. **Liquidation Preference:** Is there a liquidation preference? If so, what multiple (e.g., 1x, 2x) and is it participating or non-participating?

2.4. **Anti-Dilution Provisions:** What type of anti-dilution protection is included (e.g., full ratchet, broad-based weighted average)?

2.5. **Voting Rights:** Are there any differential voting rights for the new share class?

2.6. **Protective Provisions:** What matters require investor consent (e.g., sale of company, amending articles, new debt)?

Board Representation and Governance

3.1. **Board Seats:** How many board seats will investors be entitled to? Will there be independent directors?

3.2. **Observation Rights:** Will investors have observation rights without a board seat?

3.3. **Information Rights:** What financial and operational information will investors receive (e.g., monthly reports, annual budgets)?

3.4. **Founder Vesting:** Is there a founder vesting schedule? If so, what are the terms (e.g., {{founder_vesting_years}} years, {{founder_vesting_cliff_months}} month cliff)?

Exit Provisions

4.1. **Drag-Along Rights:** What are the terms of drag-along rights (e.g., percentage of shareholders required)?

4.2. **Tag-Along/Co-Sale Rights:** Are there tag-along/co-sale rights for minority shareholders?

4.3. **Right of First Refusal/Co-Sale:** What are the terms surrounding Right of First Refusal or Co-Sale for existing shareholders?

4.4. **Redemption Rights:** Are there any redemption rights for investors after a certain period or event?

Other Key Terms

5.1. **Employee Stock Option Pool (ESOP):** What is the size of the ESOP (pre- or post-money)?

5.2. **Exclusivity Period:** Is there an exclusivity period for due diligence and definitive document negotiation?

5.3. **Conditions Precedent:** What are the key conditions precedent to closing the investment?

5.4. **Expenses:** Who bears the legal and due diligence expenses?

SIGNATURE BLOCK

_____________________________

{{founder_name}}

{{founder_title}}

{{company_name}}

_____________________________

{{investor_representative_name}}

{{investor_representative_title}}

{{investor_firm_name}}