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Funding Term Sheet Template for Denmark

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Key Requirements PROMPT example:

Funding Term Sheet

I need a Funding Term Sheet for a Series A investment round of €5 million in my Danish technology startup, with provisions for a 15% ESOP pool and standard venture capital terms including 1x non-participating liquidation preference.

What is a Funding Term Sheet?

The Funding Term Sheet serves as a crucial preliminary document in Danish investment transactions, typically used when a company is seeking to raise capital through equity or convertible instruments. It provides a structured summary of the key commercial and legal terms that will form the basis of the final investment agreements. While primarily non-binding, the term sheet helps align parties' expectations early in the negotiation process and streamlines the path to final documentation. Under Danish law, particular attention must be paid to compliance with the Danish Companies Act regarding share classes, corporate governance, and capital requirements. The document is especially important in venture capital and private equity transactions, where it helps establish clear parameters for valuation, investor rights, board composition, and exit provisions before significant resources are committed to full documentation.

What sections should be included in a Funding Term Sheet?

1. Parties: Identification of the company, lead investor(s), and any other participating investors

2. Background: Brief description of the company, the purpose of the investment, and current capitalization

3. Definitions: Key terms used throughout the term sheet

4. Investment Amount: Total investment size and any tranching arrangements

5. Valuation: Pre-money valuation and resulting post-money valuation

6. Type of Securities: Description of the securities being issued (e.g., preferred shares, convertible notes)

7. Closing Conditions: Key conditions that must be met before the investment can close

8. Investor Rights: Key rights attached to the investment (voting, anti-dilution, etc.)

9. Board Composition: Structure and composition of the board post-investment

10. Documentation: List of key documents to be executed at closing

11. Binding Provisions: Specification of which terms are binding (typically confidentiality, exclusivity, and governing law)

12. Timeline: Expected timeline for completing the investment

What sections are optional to include in a Funding Term Sheet?

1. Liquidation Preference: Terms for preferential returns in case of liquidation - included when offering preferred shares

2. Anti-dilution Protection: Provisions protecting against future down rounds - included for most institutional investments

3. Drag-Along Rights: Rights forcing minority shareholders to join in a company sale - included for majority investments

4. Tag-Along Rights: Rights allowing minorities to join in sales by majority - included for minority protection

5. Founder Vesting: Vesting terms for founder shares - included for early-stage investments

6. Employee Share Pool: Details of employee option pool - included when establishing/expanding ESOP

7. Information Rights: Specific reporting requirements - included for significant investments

8. Registration Rights: Rights related to future IPO - included for larger investments with exit potential

9. Exclusivity Period: Period of exclusive negotiations - included when required by lead investors

What schedules should be included in a Funding Term Sheet?

1. Cap Table: Current and post-investment capitalization table

2. Key Terms Definitions: Detailed definitions of technical terms used in the term sheet

3. Timeline Schedule: Detailed timeline for due diligence and closing process

4. Material Agreements: List of material agreements requiring review or amendment for closing

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions









































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Relevant Industries

Technology

Biotech

Fintech

Green Energy

E-commerce

Healthcare

Software

Manufacturing

Clean Technology

Professional Services

Consumer Goods

Digital Media

Real Estate

Agriculture Technology

Education Technology

Relevant Teams

Legal

Finance

Corporate Development

Executive Leadership

Investment

Business Development

Compliance

Board of Directors

Advisory Board

Mergers & Acquisitions

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Investment Director

Venture Capital Partner

Private Equity Manager

Corporate Lawyer

Investment Manager

Startup Founder

Business Development Director

Board Member

General Counsel

Investment Analyst

Corporate Development Manager

Financial Controller

Investment Associate

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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