Term Sheet Battle is a concept that is active in a lot of different location, and it was held last year in Copenhagen, from where there is an video available as well. The aim of the events is spreading knowledge about term sheet negotiations when talking to investors, there where held Term Sheet Battles in both Stockholm and Helsinki in May 2013, as part of their “Nordic Tour” in collaboration with Startup Bootcamp. The events includes perspectives from both entrepreneurs and investors point of view.
In Stockholm the event was with Creandum and Sunstone Capital (Martin Hauge and Christian Jepsen) on the VC side, and Memoto‘s Martin Källström and Bird & Bird‘s Martin von Haller (who is very active in the our region as well) on the entrepreneurs side.
In Helsinki it was Daniel Blomqvist from Creandum instead, and Jimmy Fussing Nielsen (also from this region) from Sunstone Capital, “against” Kimmo Reina from Bird & Bird and Micke Paqvalén from Kiosked.
“It was great to see experienced negotiators in the ring, but another great takeaway was the VCs telling the audience what the normal terms are in Europe at the moment. As a general note, Creandum and Sunstone’s experience is that entrepreneurs have the tendency to get caught up in pre-money valuations and then get eaten up by a lot of “fun” clauses in the term sheet to protect the investor’s return. It seems obvious when saying it outloud, but really it might be very worthwhile to pull back on the valuation, and instead negotiate the best term sheet that balances your return and control in the chance of both a huge and meager exit.”
Some interesting observations can be found over at ArcticStartups, including tips about liquidation preferences, Reverse Vesting on Founder’s Stock and Representations of Warranties. If you are at all thinking about getting investment or funding, and haven’t read the article already, do so! Having better insights from Sunstone Capital and Creandum, which are two of the major VC firms active in Scandinavia, gives you a good idea what is important and not, and how they look at things.