Angel Investing: The Gust Guide to Making Money and Having Fun Investing in Startups

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Gust Series Seed Term Sheet

This term sheet for financing early stage companies with investments from sophisticated angel investors was developed by Gust, the platform powering more than 90 percent of the organized angel investment groups in the United States. The goal was to standardize on a single investment structure, eliminate confusion, and significantly reduce the costs of negotiating, documenting, and closing an early stage seed investment.

For those familiar with early stage angel transactions, this middle-of-the-road approach is founder-friendly and investor-rational, intended to strike a balance between the Series A Model Documents developed by the National Venture Capital Association that have traditionally been used by most American angel groups (which include a 17-page term sheet and 120 pages of supporting documentation covering many low-probability edge cases), and the one-page Series Seed 2.0 Term Sheet developed in 2010 by Ted Wang of Fenwick & West as a contribution to the early stage community (which deferred most investor protections and deal specifics until future financing rounds).

TERMS FOR PRIVATE PLACEMENT OF SEED SERIES PREFERRED STOCK OF [Insert Company Name], INC. [Date]

The following is a summary of the principal terms with respect to the proposed Seed Series Preferred Stock financing of ________, Inc., a [Delaware] corporation (the “Company”). Except for the sections entitled “Expenses,” “No Shop/Confidentiality,” and “Special Terms,” such summary ...