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Venture Deals

Should IC Approval Be Required for Non-Binding Term Sheets or Only Definitive Investments in Funds?

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May 03, 2023
For funds with an IC should a (non-binding) term sheet already be subject to IC approval or only the definitive investment?
1 answer
Accepted Answer
May 03, 2023
I recommend that you don’t sign term sheets (binding or non-binding) unless you are confident that you are going to wire. It creates a very bad dynamic between you, and the entrepreneur (who may have an unrealistic expectation here also), and if the deal does not happen you may have reputation risk which is not good for your brand. If you hold yourself to the highest ethical standard, you will win in the long run. :muscle:

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