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This is a simple term sheet for use when a company is raising capital from friends and family type seed investors. It sets out the terms agreed between the company and the investor prior to preparing the formal agreements. The term sheet is not legally binding (other than the confidentiality obligations in part B).
There are no standard terms that apply to investment from seed investors – these types of investments can often be relatively informal and usually do not include the investor protection provisions required by professional investors or formal investor groups such as angel groups.
Under New Zealand securities legislation, a company may not issue (or offer to issue) shares, options or other securities without providing detailed disclosure information to the new shareholders unless it is satisfied that an exclusion to the information disclosure requirements of the Financial Markets Conduct Act 2013 applies in relation to that offer or issue. Please see our NZ securities law – tech company capital raising guide for an explanation of the relevant exclusions.
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