Inovo Term Sheet and Investment Agreement templates

I am happy to announce that we are publishing templates of our term sheet and investment agreement. These are the documents we use with startups that we invest in.

For your convenience, all the files mentioned in this blog post are gathered on this drive 💾.

Term sheet

• 🔽 You will find it here.
• It is simple, founder-friendly and we hope it promotes the best practices of VC investing.
• It is the same for founders in any jurisdiction — Poland, other CEE countries or Delaware/US.
• We have also prepared a version with additional comments explaining each point in detail (🔽 Here is the TS template with comments.)

Investment agreement documentation

• Here is the template of docs → for a 🔽 US/Delaware company.
• Investment agreement template for companies incorporated in Poland → under review, coming back soon.
• If your company is incorporated in any other CEE country and you want to stay there → we will need to prepare separate docs for you.

Why we decided to publish these documents

1. We want to minimize the time that both sides spend on negotiating legal docs. Any hour spent on docs is an hour not spent on product building, client management or team discussions.
2. We want you to be 100% focused on your business, as quickly as possible. We know fundraising can be a difficult process, but hopefully not with us 😀
3. There are no “strings attached” or unusual points; we do not focus on scenarios that with 99% probability will not materialize.
4. We know that it’s not unusual in other investor discussions to have long negotiations result in the addition of obscure or confusing legal requirements to the agreement. We don’t do that. We offer full transparency right from the start and founders can understand right away what our offer is.
5. This term sheet is public, so you can check what other founders or lawyers say about it. We have nothing to hide. In fact, we encourage you to do your due diligence.
6. We value speed, simplicity and transparency. We hope this makes your fundraising a little bit easier. We also hope that this gives you a better understanding of what cooperation with Inovo looks like later in the process.
7. We want to share best practices.

• We want to show what a good term sheet looks like, both to first-time founders and more experienced entrepreneurs, as well as to other VCs.
• We sometimes see bad practices in the market. We want to fix that.
• Feel free to use it, even outside Inovo.
• Feel free to show it to your investors while negotiating your term sheet. We strongly believe you should not agree to stricter terms, which sometimes happens.
• If your investors do not want to accept it, feel free to reach out to us:)
• If you think some points are outdated or simply should not be there, please let us know. Here is a form to submit questions.

How it was prepared

On the term sheet side

1. Huge kudos to the Point Nine team. We have to admit that we were partly inspired by them. They did a great job with their template some time ago. They also do a great job spreading best practices.
2. Apart from Point Nine, you will find templates from the famous Secrets of Sand Hill Road Book as well as NVCA 🔽 in this link.

On the investment agreement side — the version for Delaware companies is based on the NVCA standard

1. You will find Model Legal Documents from the National Venture Capital Association (“NVCA”) on their website.
2. You will find a comparison, showing precisely what we changed in the NVCA docs 🔽 here.

The version of the investment agreement for companies incorporated in Poland was prepared in cooperation with Kochański & Partners

1. Many thanks to the team — especially Paweł Mardas, Szymon Balcerzak and Sebastian Woźniak 🙏.

What’s next

1. The moment you receive a term sheet from us means that we are VERY serious about your business and we would like to invest.
2. From this moment we will do everything to close the investment as quickly as possible (disclaimer from our lawyer: term sheet is not binding, unfortunately).
3. In our current fund (Inovo 2), every signed term sheet has been converted into a final investment agreement. We hope we keep this streak going!

I truly hope this will either save your time or help you negotiate better terms with your investors. Stay ambitious!

Tomek, Michał, Maciej, Mateusz, Karol, Krzysiek, Oliwia & the entire Inovo team.

Inovo Venture Partners is a first-choice VC for ambitious founders from Poland and the CEE region. We back early-stage, post-traction startups with up to €3M of initial investment, and help them build global brands while driving growth of the local startup ecosystem. We take great pride in being close to top founders who think big. We’re investors in: Booksy, Restaumatic, Sotrender, Infermedica, Spacelift, Tidio, AI Clearing, Zowie, Jutro Medical, Intiaro, Packhelp, Preply, Eyerim, Allset, SunRoof, Archbee and AhoyConnect. Our second fund reached a total of €54M.

For more information visit: inovo.vc

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