This article describes the term sheet document for a Convertible Financing (such as SAFEs or Convertible Notes) and how you can access it on Savvi.
Companies are often raising pre-seed and seed capital through convertible financings because it is quicker, cheaper and easier to do than selling preferred stock. Convertible Financings can be done through different instruments, but the most common are Convertible Notes and SAFEs.
Convertible Notes are debt (promissory notes) that can convert into equity.
SAFE stands for Simple Agreement for Future Equity. Similar to a convertible note, investors give the company money now in exchange for the right to convert that investment into equity in a future transaction. A SAFE is commonly used these days by startups to raise funds. Many companies like it because there is not interest and no maturity date.
The term sheet for a convertible financing outlines the specifics of the funding, such what type of instrument you are using (SAFE v. convertible note, etc.), conversion discount, valuation cap, and whether a valuation cap is pre-money or post-money.
Although generating a Term Sheet is not a requirement to do a convertible financing, many companies generate one as the first step in their financing process.
To generate a Term Sheet for a convertible financing on Savvi, you can access the "Prepare a Convertible Financing" workflow using the link below or by searching for the relevant workflow in the Workflows tab in your Savvi account.
Access this document through the following workflows:
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