116 lines
3.7 KiB
Markdown
116 lines
3.7 KiB
Markdown
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# Outside Capital Raising
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insert any terms and conditions here....
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perhaps mention sources of revenue, markets being pursued etc...
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## Non Equity and Non Debt based
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Capital will be primarily sought through the pursuit of abc from xyz (but not
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limited to):
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*
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*
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*
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*
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*
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## Restrictions on Capital Sources
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*
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*
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## Equity Based Raises
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### General Conditions and Requirements
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Any grant of equity in exchange for outside capital investment in the Company
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shall be on the following (or substantially similiar) terms and conditions ,
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and require unamious written consent of the Members and the Board Of Directors.
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### Terms and Conditions
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[PUBLIC] Earnest Shared Earnings Agreement v1.3
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SHARED EARNINGS AGREEMENT BETWEEN EARNEST CAPITAL AND Company.
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Date
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The following is a summary of the principal terms with respect to the proposed financing of _______________ (the “Company”). Except for the section entitled “Confidentiality,” this summary of terms does not constitute a legally binding obligation. The parties intend to enter into a legally binding obligation only pursuant to definitive agreements to be negotiated and executed by the parties.
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Amount of Investment
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$___________
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Shared Earnings
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By the 10th day of each quarter, the Company will pay the Investor the Percentage
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(as defined below) of: the Company's Founder Earnings (as defined below)
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less the proportional Founder Earnings Threshold (as defined below),
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in the preceding quarter.
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Shared Earnings shall continue until the Investor has received the Shared Earnings Cap.
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The Percentage
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The Percentage shall be ___%.
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Net Income
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Net Income means net income determined in accordance with GAAP.
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Founder Earnings
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Founder Earnings means Net Income, adding back any founders' salaries.
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Founder Earnings Threshold
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$________ per founder per year.
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Shared Earnings Cap
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The Shared Earnings Cap will be __X the investment amount.
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Equity Basis
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The Equity Basis will be the greater of (i) any unpaid portion of the Shared Earnings Cap,
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or (ii) the Amount of Investment.
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Equity Conversion
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The Investor has the right, at its option, to convert the Equity Basis into the shares
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sold by the Company in its next fixed-price round of financing, at a price per share
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equal to the lesser of
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(i) the price of the securities sold in the next financing,
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or (ii) at a price per share calculated by dividing the Valuation Cap (defined below)
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by all issued and outstanding shares plus all shares reserved for issuance
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under any equity incentive plan at the time of the closing of the next financing.
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Valuation Cap
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$_____________
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Sale
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On a sale of the Company, the Investor is entitled to receive the
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greater of
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(i) any unpaid amount of the Shared Earnings Cap or
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(ii) the amount the Investor would be entitled to receive if it converted the Equity Basis
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at the Valuation Cap.
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Information Rights
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The Investor is entitled to standard information and inspection rights including any
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records of accounting necessary to verify Shared Earnings calculations.
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Board Observer
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The Investor will be entitled to attend Board Meetings as an observer upon its request,
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subject to executing a standard form observer confidentiality agreement.
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Participation Rights
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The Investor will have the right to participate on a pro rata basis in subsequent
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issuances of Membership Interests, subject to customary exclusions.
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Confidentiality
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Without the consent of the Investor, the Company shall not disclose these terms to
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anyone other than the Company's officers, directors, and key service providers.
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COMPANY:
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Name:
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Title:
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Date:
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INVESTOR:
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Name:
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Title:
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Date:
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