Managing Your Cash Flow

Published

European investors agree on standard term sheet for startups

2 Mins

Nearly 50+ investors from across Europe have agreed on two standard term sheets for entrepreneurs and investors to work from. 

The general SeedSummit Term Sheet and its EIS-friendly variant aim to be practical legal documents for entrepreneurs to get acquainted with the standard terms, and for investors to use for “fast, fair, transparent and affordable funding rounds”.

The terms and documents for both versions have been validated by Europe’s most active seed investors, and include all major common terms found in a term sheet for this stage.

The first document is a “general use” term sheet, typical for institutional investors. The second is an EIS-friendly version, which allows for additional flexibility around EIS tax relief. 

The list of investors signed up to use the term sheets is impressive. It includes: Index Seed, Kima Ventures, Eden Ventures, Point Nine Capital, Doughty Hanson Technology Ventures, Passion Capital, Seedcamp, NESTA, Wellington, 360 Capital, Henq, Earlybird, GIMV, Charlotte Street Capital, Estag Capital, ACT Ventures, Notion Capital, Venrex, Samos, Atomico Ventures and Northzone, among others.

“We hope these documents help bring coherence to the fragmentation of the European market,” a news release from SeedSummit explains. 

“The documents are meant to serve a common goal for the community: making seed funding easier to access, better to understand, and fair for all parties. We are looking forward to them being used, adapted, and spread.” 

The origin of the initiative was inspired by the “Series Seed” documents agreed by American investors. 

SeedSummit, which is responsible for the documents, was launched as a forum for active seed investors across EMEA, to meet and get to know each other better.

You can view the term sheets here.

Share this story

Quiz James Caan on Twitter this Friday!
Ten tips to manage staff during the holidays
Send this to a friend