http://www.avvo.com/legal-answers-search/venture-capital.html Avvo.com - Venture Capital Legal Guides http://www.avvo.com/legal-guides/ugc/venture-capital-term-sheet-founder-and-employee-stock-restrictions Many sophisticated venture investors will ask that the shares held by founders and employees be subject to forfeiture upon departing the company, but with specified percentages becoming vested against forfeiture over time. Mon, 15 Jun 2009 13:14:43 PDT http://www.avvo.com/legal-guides/ugc/venture-capital-term-sheet-financing-expenses Typically with venture capital investments, the Company will pay the legal expenses of the attorney for the investors; generally the investors will select a single attorney to represent all the investors if multiple investors are part of the syndicate. Thu, 21 May 2009 16:41:43 PDT http://www.avvo.com/legal-guides/ugc/venture-capital-term-sheet-pay-to-play-anti-dilution One other wrinkle on anti-dilution clauses is the so-called “pay-to-play” provisions, which require the investors to participate in the dilutive round in order to receive anti-dilution protection with respect to their higher-priced preferred stock. Fri, 25 Sep 2009 13:31:13 PDT http://www.avvo.com/legal-guides/ugc/venture-capital-term-sheet-anti-dilution Dilution prevention provisions are designed to protect the investor from dilution that may occur in subsequent financings where stock is sold at a price lower than the investor originally paid. Tue, 17 Nov 2009 14:21:53 PST http://www.avvo.com/legal-guides/ugc/venture-capital-term-sheet-conversion-rights Preferred stock will generally have a voluntary conversion right — permitting any holder of preferred stock to convert their preferred shares into common shares at any time. Thu, 03 Sep 2009 16:44:48 PDT http://www.avvo.com/legal-guides/ugc/venture-capital-term-sheet-preemptive-rights Investors will often request preemptive rights or a right of first refusal as a tool to allow the investor to maintain its ownership percentage. Fri, 16 Oct 2009 14:00:03 PDT http://www.avvo.com/legal-guides/ugc/venture-capital-term-sheet-board-representation Venture capitalists will almost always have at least some representation on the company's board of directors, usually the lead investor or investors of the round will receive a board seat as a result of their investment. Sat, 31 Oct 2009 14:46:22 PDT http://www.avvo.com/legal-guides/ugc/venture-capital-term-sheet-voting-rights Venture Capitalists will usually negotiate for veto rights in the event of specified events or protective provisions in the form of special voting rights of preferred stock holders are often (but not always) included in the term sheet. Thu, 21 May 2009 16:41:41 PDT http://www.avvo.com/legal-guides/ugc/venture-capital-term-sheet-co-sale-rights The co-sale right gives the investor the right to sell its shares on the same terms as the investors — usually on a pro-rata basis of its total ownership percentage in relation to the total sale. Tue, 08 Sep 2009 14:00:18 PDT http://www.avvo.com/legal-guides/ugc/venture-capital-term-sheet-registration-rights Registration rights are an important right to investors since they provide a contractual right for investors to demand that the company register their shares with the U.S. Securities and Exchange Commission. Tue, 24 Nov 2009 10:18:34 PST