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How to Structure Your Deal
Venture Planning Associates provides deal structuring services on a fee basis. If you are having trouble getting your deal funded or structured properly consider the following when developing your term sheet:
The financing for each deal is unique. We the best approach is to structure a fair deal for all concerned and then make the presentation. The marketplace for venture capital deals will give you immediate feedback. You will either get funded or rejected. Always research the reasons for either event.
8 Key Elements of a Great Deal
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Does the plan include early investor return of capital?
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How is the premium paid for the risks involved calculated?
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What other "kickers" or other incentives not necessarily monetary in nature are being offered?
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Are there warrants or other options to increase equity share or liquidate early?
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Have you considered the tax and legal considerations including state securities laws?
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What business organizational format are you using and why? Is it compatible with the proposed exit strategy?
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Are buy-sell agreements, key man insurance issues addressed, convertible preferred stock, and management contract agreements included?
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How will additional capital and further dilution of stock be handled?
All of these issues are intertwined and like a kaleidoscope. When you adjust one issue all the others change. We recommend that you develop the best business plan, valuation and financing plan possible.
Then calculate some return that allows the company to prosper, yet attract investors and allow for further growth while maintaining control. Sounds difficult? It is! While we may not be able to keep everyone happy, our years of experience will be at your disposal.
Then test it in the financial marketplace, adjust and try again. In the space of four months we rewrote a plan 12 times until all parties were satisfied and the client received $5 million first round financing from a two Venture Capital Funds.
For additional information on options, click here for information on ordering Report #4 of our Venture Capital Reports package, "How to Structure Your Deal".
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