Term Sheet Time

January 2019 — #Class of 2018/19, #Tim Doughty

Term Sheet Time

Preparation and setup of the class

We followed the lead of last year’s class and did not do the Term Sheet competition as we wanted to focus on getting as much out of our guests as possible. It is not often you get the opportunity to ask questions to those with experience in a more of an informal setting.

The first thing I did for this class was to reach out via various channels to potential guests who would add value to the session. I looked for guests who could bring different aspects to the panel.

Once the guests were all taken care of, I planned questions that I wanted to ask and pre-empted potential follow up questions. This is a key element as it will form the foundation of your discussion.

What happened on the day?

We managed to get the following guests along:

  • Tom Hatton, founder of RefMe and investor in early stage start-ups. Tom has been through many rounds of funding and successfully raised around $10 million over the six years he worked on Ref Me. He now invests in early stage start-ups as well as some consulting work.
  • Sam Rason, founder of VivaCity App and SLP Alumni. Sam recently went through his first funding round.
  • Steve Barnett, partner at Shoosmiths. Steve is an experienced venture capital lawyer and has been a great asset to the SLP community over the programme so far.

Our very own Steven Hess also joined the panel to share his experiences too, which was fantastic!

With a great mix of experience on our panel from an investor side, legal side and an entrepreneur’s side it lead to some really interesting discussions. We started the session with the panel discussion where I asked the questions I prepared prior to the session, which dealt with a lot if the fundamental principles around term sheets and what should be included in them.

After the panel discussion we had a short break before opening the floor up to questions from the fellows. It was great to see a great deal of engagement with the guests. This Q&A gave the fellows the chance to really get what they want out of the session and as mentioned those at different stages can get personalised advice on their current situation.

The feedback from the guests were positive and they felt that there were some great conversations that were had and even they learnt a few things!

Retrospective – what did we learn?

There were some interesting takeaways from the session. One point that was raised was to approach those investors first who you are not bothered about. This will give you some practice attempts to nail your pitch to those who you really want to invest. This is a small detail but can have a significant impact. Another point to note is to ensure that you assign one person to be the point of contact when it comes to raising funds. If too many people are involved, you can end up with your BAU being affected which is the last thing you want when you are trying to prove how successful your business can be! Another important point I want to mention was a lot of investors will pressure you to sign a deal, but despite the notion of biting an investor’s hand off if they are offering money, you have got to be wary of the terms you are signing up for. This leads onto my last lesson we learned in the session which is you have got to look into the future when you are raising funds. Ask yourself questions like: do I want to raise funds beyond this seed round? If so, how many rounds do I think I will aim for? The answers to these questions can have an impact on how you negotiate your first funding round.

Message to the Class CEO of 2020

My advice to the class CEO of 2020 is that ensure you have your questions planned well and I think it would be a great idea to ask your peers if they have any questions they would want to be included in the panel discussion. One of our guests on the day wanted to know the stage each founder in the room was at, so this information may be useful for the guests so each fellow can get as much out of it as possible regardless of what stage they are at. Make sure you watch the time as it is easy to get lost in the interesting discussions you will be having, but don’t forget your fellows will have plenty of questions for the guests I am sure. Lastly, Christmas is a hard time to get people to commit to an event early in the new year so start early. Use the SLP Alumni channel which helped me in sourcing a guest who had just been through a funding round a few months prior