TERM SHEET - SEED / SERIES A INVESTMENT

PREAMBLE

This Term Sheet dated [Date] between [Company] and [Investor] outlines principal investment terms. **BINDING:** Economics, board rights. **NON-BINDING:** Exclusivity. Legal Framework: US Securities Act §5, EU Prospectus Regulation 2017/1129.

Security: [Series A Preferred Stock]
Amount: EUR/USD [X Million]
Post-Money Valuation: EUR/USD [X Million]
Investor %: [X%]

2.1 Price per Share: EUR/USD [X]

2.2 Liquidation Preference: Series A receives 1x non-participating preference per Delaware §151.

2.3 Anti-Dilution: [Broad-based / Narrow-based] weighted-average

2.4 Dividends: [None / X% annually]

Board: [X directors] - Founder, Investor rep, Independent

Series A Veto Rights (Major Decisions):

Drag-Along Rights: If Series A + Founders >50% approve sale, all must sell.

Tag-Along Rights: If founders sell >50%, investor may tag-along at same terms.

Vesting: [4-year, 1-year cliff] per IRC §409A

Acceleration: [Single-trigger X months / Double-trigger 100%]

Restrictions (no investor consent): Cannot sell >10%, pledge, change cap structure

5.1 Information Rights (BINDING): Company provides Series A quarterly financials (within 45 days of quarter end), annual audited statements per EU Transparency Requirements, updated cap table (pro-rata ownership).

5.2 Inspection Rights: Series A may inspect Company books/records upon reasonable notice (2x/year)

5.3 Pro-Rata Rights (Future Rounds): Series A has right to purchase up to [pro-rata %] of new shares in Series B+ rounds to maintain ownership %, exercisable within 20 days of notice per Delaware §151

6.1 Employee Option Pool: Company reserves [10-20%] fully-diluted for employee equity grants (pre-money pool)

6.2 409A Valuation: Company obtains independent 409A valuation (required per IRC §409A) BEFORE this round close; establishes FMV for option pricing

6.3 Cap Table Representation: Company provides fully-diluted cap table (including all outstanding options, SAFEs, convertible notes) to Series A within [5 business days] of closing

• Stockholders Agreement signed (with board veto rights, anti-dilution)
• Certificate amendment (creating Series A Preferred)
• IP assignments from founders (assignments signed)
• Cap table fully-diluted with option pool calculation
• Rep & warranties audit (legal counsel diligence)
• 409A valuation certificate
• Board minutes approving round (if required)

8.1 Exclusivity Period: Company exclusive to Investor for [60 days] (non-binding); Company shall not solicit other investors or share materials with competitors.

8.2 Expected Timeline: Expected close within [X weeks] of Term Sheet signature. Investor commits to financing ~[X date].

8.3 Break-Up Clause (Optional): If deal not closed by [deadline], exclusivity terminates + Company may pursue other investors

Law: ☐ Delaware ☐ German | Disputes: DIS Arbitration