Preferred Shares Term Sheet

Description
Also known as the 'Preferred Light,' the preferred term sheet is used often for a bigger seed round later on in the fundraising process.

Advantages:
Investor's rights are well protected
The structure is organised in such a way that the ROI for the investor is more important than those of common shareholders
The investor will be protected against investors that come later on with more power
American investors recognize and generally appreciate preferred share term sheets

Disadvantages
Can be slightly unfair towards founders
The term sheet itself can be a bit complicated
May make it slightly more difficult to land rounds in the future

*Originally shared on NACO Canada's website*