Seedsummit, an online platform for helping entrepreneurs find European seed stage investors, said it developed a set of standardized term sheet documents for cross border seed investing in Europe. The organization said it worked with numerous investors on the suggested documents, including with Index Seed, Kima Ventures, Eden Ventures, Point Nine Capital, Doughty Hanson Technology Ventures, Passion Capital, Nesta, Wellington, 360 Capital, Henq, Earlybird, GIMV, Charlotte Street Capital, Estag Capital, ACT Ventures, Notion Capital, Venrex, Samos, Atomico Ventures, and Northzone.
European investors agree on standard term sheet for start-ups
Raising funds for a new start-up can seem like an overwhelming effort for a new entrepreneur largely due to the time, cost, and lack of transparency in the process. The fact that most entrepreneurs only go through this process a few times in their career adds to the challenge: after all, the investor usually knows what to expect.
When Seedsummit (http://seedsummit.org/blog/) was first launched it was planned as a forum for active seed investors across EMEA to meet and get to know each other better. We were impressed by the 50+ investors who participated and actively debated and discussed issues important to them. A major To Do agreed on was to help investors and entrepreneurs across EMEA by standardizing on seed stage investment agreements. Today we are excited to announce that several of the investors across EMEA have agreed on just that.
After working closely with Index Seed, Kima Ventures, Eden Ventures, Point Nine Capital, Doughty Hanson Technology Ventures, Passion Capital, Seedcamp, Nesta, Wellington, 360 Capital, Henq, Earlybird, GIMV, Charlotte Street Capital, Estag Capital, ACT Ventures, Notion Capital, Venrex, Samos, Atomico Ventures, and Northzone, we are proud to announce a set of suggested, reader-friendly, and guideline financing documents. We hope these documents help bring coherence to the fragmentation of the European market. By bringing the players to reach a common agreement for the benefit of the entrepreneur we hope to save entrepreneurs time and money and to ensure that the limited funds they are raising are used for the most important thing: building product for their customers. Our Group of partners are actively investing across UK, Germany, France, Israel, Ireland, Scandinavia amongst many others, but we would love to have many more partners globally join our initiative.
Today, we are publishing the two suggested term sheets, the general SeedSummit Term Sheet and an EIS friendly variant which should be practical both for entrepreneurs to get acquainted with the standard terms, and for investors and other players in the ecosystem to utilise for fast, fair, transparent and affordable funding rounds. The terms and documents in both versions have been validated by Europe’s most active seed investors and include all major common terms typically found in a term sheet for this stage. The origin of the initiative was inspired by the Series Seed docs of the USA.
The documents are meant to serve a common goal for the community: making seed funding easier to access, better to understand, and fair for all parties. We are looking forward to them being used, adapted, and spread. Likewise, please keep us up to date on what you think about them, when you use them and how they helped you take your companies forward.
You can see the documents here: http://seedsummit.org/legal-docs/