4 ms·
There is much to be decided about any investment deal beyond what is contemplated in the protocol. For some examples: http://mashable.com/2011/05/27/term-sheet
by jarrett 14y ago
There is much to be decided about any investment deal beyond what is contemplated in the protocol. For some examples:
http://mashable.com/2011/05/27/term-sheet-startup-investing/ http://mashable.com/2011/05/27/term-sheet-startup-investing/
Just as a thought experiment, let's imagine what would happen if you tried to enforce this handshake deal (complete with email confirmation per steps 3 and 4). How would the courts decide all the issues that would normally have been negotiated and agreed to in a terms sheet?
- mjn 14y agoCourts have some leeway in what remedies to use, precisely for some of those pragmatic reasons. One remedy for a contract breach is for a court to issue an injunction ordering performance of the contract. As you note there are some practical problems with a court ordering VCs to invest on the basis of this kind of agreement. But another remedy is for the court to just award monetary damages (how to calculate damages for nonperformance of a contract is a whole other can of worms, but it's something courts do).