Christina Tsakona presenting at AIT's Startup Lecture Series - Steps to Success: “Set Up Your Start Up - Investment Term Sheets in Greece/ Europe/ US”. In collaboration with AIT and CoLab@AIT, this event focused on investment term sheets. A team of attorneys analyze the basic legal terms in investment term sheets and convertible notes for startup companies that are about to or wish to raise funds from Greek, European or US investors.

1. 07
Thurs
COLAB
AIT

2. WHO WE ARE

3. TODAY
•CONVERTIBLE NOTE
•INVESTMENT TERM SHEET
•VALUATION & LIQUIDATION PREFERENCE

4. CONVERTIBLE NOTES

5. AT A GLANCE:
• IT IS A LOAN (SORT OF)
• NO CURRENT VALUATION
• SPEED, SIMPLICITY & COST

6. CONVERTIBLE NOTE
CONVERTIBLE NOTE
“A document signed by
a borrower promising
to repay a loan under
agreed-upon terms”

7. INVESTOR’S OPTION
TAKE HIS MONEY CONVERT INTO SHARES
BACK

8. BASIC TERMS
FINANCING AMOUNT
DISCOUNT
MATURITY DATE
INTEREST
CONVERSION
OPTIONS

9. CONVERSION OPTIONS
AUTOMATIC CONVERSION
SALE OF THE
VOLUNTARY COMPANY
CONVERSION

10. NEGOTIATIONS
YOU THE INVESTOR FINAL
INTEREST 5% 10% 8%
DISCOUNT 10% 30% 20%
CAP NO YES ?
MATURITY 2 YEARS 1 YEAR ?
DATE
SALE 1X 2X 2X

11. CONVERSION OPTIONS
AUTOMATIC VOLUNTARY SALE
CONVERSION CONVERSION
QUALIFIED YES NO N/A
FINANCING
PREFERRED YES (@discount) NO N/A
STOCK
COMMON NO YES N/A
STOCK
LIQUIDATION N/A N/A YES (2X)
PREFERENCE
MONEY BACK NO YES & NO YES

12. CAP – CASE STUDY
WITHOUT CAP WITH CAP
• Investor puts 100K • Investor puts 100K
• Investor estimates valuation at • Cap at 4M
4M • Round at 20M
• 9 months after  Round at • Investor buys his shares
20M valuation based on the 4M valuation
• Investor will have to buy his
shares with 20% discount at
20M valuation

13. WITHOUT CAP
FOUNDERS INVESTOR

14. END OF CONVERTIBLE NOTE
•BANKRUPTCY/CLOSING DOWN THE BUSINESS
• COMPANY PAYS BACK AMOUNT WITH INTEREST
• IF NO ASSETS  INVESTOR GETS NOTHING
•FINANCING ROUND: INVESTOR  SHARES
•EXIT: INVESTOR  MONEY

15. WHAT DOCUMENTS YOU ARE
SIGNING
TERM SHEET
PURCHASE AGREEMENT
CONVERTIBLE NOTE

16. THANK YOU

17. Let’s Connect
Linkedin/in/tsakona
Facebook.com/ctsakona christina@dimitrioulaw.
Twitter.com/ctsakona
www.dimitrioulaw.com