� What are some of the contextual elements of Trendsetter Inc that you consider relevant for the analysis of the two financing offers?

� How do the term sheets compare? Hint Start by structuring the comparison into topics:� Valuation

� Liquidation and Antidilution

� Corporate Governance

� Vesting and Employment

� Comparison and Renegotiation

Remember: at this juncture these term sheets are proposals ... nothing is cast in stone.

Session 4 Case Study QuestionsTerm Sheet Negotiations for Trendsetter Inc.

© 2013 Viney Sawhney 1

Session 4 Case Study QuestionsTerm Sheet negotiations for Trendsetter Inc.

� Valuation:

� What is the amount to be invested?

� What is the pre-money valuation for the case of

Mega?

� How does the revenue performance hurdle

affect the pre-money valuation in the case of

Alpha?

� How likely is it that Trendsetter will pass this

hurdle?

© 2013 Viney Sawhney 2

Session 4 Case Study QuestionsTerm Sheet negotiations for Trendsetter Inc.

� Liquidation and Antidilution:

� How do the term sheets differ in terms of

liquidiation preference for investors?

� What types of secutities will be issued for

each?

� How do the liquidation scenarios under Alpha

and Mega differ?

� How do the antidilution provisions differ?

© 2013 Viney Sawhney 3

Session 4 Case Study QuestionsTerm Sheet negotiations for Trendsetter Inc.

� Corporate Governance:

� Compare all the governance terms (exclude

founders’ employment and termination)

� How would you rank the critical issues?

� Vesting and Employment:

� How do the term sheets compare?

� How would you rank the critical issues?

© 2013 Viney Sawhney 4

Session 4 Case Study QuestionsTerm Sheet negotiations for Trendsetter Inc.

� Comparison and Renegotiation:

� How do the term sheets compare?

� How would you rank the critical issues?

� International Comparison:

� How is a term sheet different in other

countries?

� What could be the reason for the differencs or

similarities?

© 2013 Viney Sawhney 5