angel-funding-terms

Vocabulary Word

Definition

'Angel funding terms' refer to the conditions set when an affluent individual, known as an 'angel investor', provides financial support to a start-up. It's like agreeing on repayment plans when a friend lends you money.

Examples in Different Contexts

In investment agreements, 'angel funding terms' outline the specifics of the deal between the investor and the startup, such as conversion rights, liquidation preferences, and anti-dilution provisions. An investment lawyer might say, 'It's important to clearly define the angel funding terms to protect both the investor's and the entrepreneur's interests.'

Practice Scenarios

Tech

Scenario:

The new software has great monetization potential. Let's talk about what might be a fair return on our investment.

Response:

Based on the projected returns, we should arrange angel funding terms that include either a higher equity percentage or a board seat.

Startup

Scenario:

Our venture is gathering interest from several parties. We need to strategize our position for the negotiation table.

Response:

We should research comparable startups and their angel funding terms to strategize our negotiation position.