Term Sheet from Hell

James Chan, Chief Hustler of Silicon Straits and Principal at Neoteny Labs, shares his thoughts on term sheets in his series “Term Sheet from Hell”.

I thought I’d seen it all, but I was wrong.

An entrepreneur was referred to me by a friend. He had just received a term sheet from an investor, and wanted a second opinion. My friend figured I knew my term sheets, and introduced him to me. I’m always happy to be helpful, and took a call with the entrepreneur.

I was dismayed, but not surprised by what I saw. It’s just as hard being a young VC as it is to be an entrepreneur trying to fundraise in Southeast Asia.

I advised him to hold off on signing it and suggested that he secure term sheets from other investors. I got permission from the entrepreneur to discuss some of the clauses from the term sheet, and will be writing a series of blog posts about them. I hope to publish something every few days. My objective is to help the uninitiated amongst you to better understand why this is a term sheet from hell, and how it would affect you and your business subsequently.

Stay tuned!

About the author

James Chan is Chief Hustler of Silicon Straits, a tech venture foundry focused on Southeast Asia. James is also Principal at Neoteny Labs, which manages a US$5M fund that invested in 24 start-ups in Asia and US. Prior to Silicon Straits and Neoteny Labs, James honed his craft at Walden International, Infocomm Investments and Infocomm Development Authority of Singapore. In his spare time, James enjoys fatherhood and photography, and pens his thoughts on his blog at www.motochan.com.

This post was originally published on James Chan’s blog as “Term Sheet from Hell“.