A new term sheet for version 2.0 of the New Zealand startup market
As the New Zealand startup economy reaches its next phase, we wanted to usher it in with a new term sheet template for both founders and investors to use and learn from.
One of the primary goals for Hillfarrance is to become Aotearoa New Zealand’s preferred source of value and capital for Kiwi entrepreneurs. To help deliver this we have been focused on bringing the NZ venture capital process and criteria up to parity with the rest of the world, especially when it comes to founder equity, valuation and round classification.
We started last month with the publishing of our recent valuation matrix, which for your reference is below:
Working with Tompkins Wake, we are wrapping up the year with the publication of a convertible note template that investors can use when leading a round or a founder can use to better understand the process.
Term sheets can be intimidating as a first time founder. As it is likely the first time you’ve seen a term sheet, the intricacies of the deal can be difficult to understand. You can spend hours trying to understand a term sheet and what exactly makes up a “good” term sheet. As the creators of the most popular open-source term sheet, Y-Combinator, writes, “we’ve noticed a common problem: founders don’t know what “good” looks like in a term sheet.” Here is our best stab at defining "good" in the New Zealand market.
How do I get my hands on it?
We have also utilised TW's tech stack to build this into simple Q&A format that will take your answers and automatically build a tailored term-sheet for your business.
We believe that the most effective way for the New Zealand startup economy to reach version 2.0, is through the sharing and democratisation of content and materials that help accelerate growth. A tool like this is a good way for the fundraising process to start on the right footing.
What about the Angel Association of New Zealand's term sheet template?
We love how the AANZ has become the hub for all things early stage in New Zealand. The term sheet template they published in 2017 made a huge positive impact in the development of our ecosystem. However, since 2017 the funding landscape for startups has evolved considerably and we felt it was the right time, collaborating with TW, to provide a new proxy for founders to use when raising capital to fuel their business.
Some of the key updates and differences are as follows:
We hope you find this a useful tool for your journey from startup to unicorn.
Best of luck.