Common Shares Term Sheet

Description
A Common Share Deal will fully negotiate all terms in the Shareholders' Agreement as well as aligning founders and investors with the same class of shares. If valuation is agreed on, this can be used any time before a Series A.

Advantages:
Aligns the entrepreneur and the investor
Straightforward and common form of term sheet
Should be easily and quickly negotiated
Avoids long calculations and different share classes

Disadvantages:
You will need an experienced investor who is able to negotiate terms and valuation
Because it is quite sophisticated, this doesn't suit Family & Friends investment
It may not contain all the protections that an investor would like
Valuation may be locked in too early
May not be ideal for investors in the US

*Originally shared on NACO Canada's website*