3 ms·
If a term sheet isn't a deal, and I kinda agree that it isn't, then what is an exclusive, six-month term sheet? Why would someone sign a six-month exclusive no
by CalChris 7y ago
If a term sheet isn't a deal, and I kinda agree that it isn't, then what is an exclusive, six-month term sheet? Why would someone sign a six-month exclusive non-deal?
BTW, a term sheet is usually very specific about it being for discussion purposes only.
- matthewowen 7y agoTo take a lesson from Thucydides, "the strong do what they can, and the weak suffer what they must".
- bsder 7y agoSome level of exclusivity isn't necessarily bad. The purchasing company doesn't want you using their deal to shop around. VC's are sheep, and having Softbank interested would generate lots of FOMA (Fear of Missing Out) amongst the herd. However, 6 months instead of 30-45 days without a useful fee for non-execution sounds like the company wasn't in a good place to begin with.
- jalonso510 7y agoWhen term sheets say they are non-binding, they will usually say "except the sections about confidentiality and exclusivity". So those will be the only parts that actually are enforceable promises. But the exclusivity period is typically 30-45 days. There would have needed to be some particular reason for six months, given how far off-market it is.
- CalChris 7y agoThanks. No shop. It is, in fact, spelled out in the NVCA model term sheet. Still, why SoftBank would ask for 6 months is a conundrum.