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Investment Term Sheets
Bruce Birkett Associates (BBA) has put together a number of different investment term sheets for its clients. Many term sheets include debt and equity options based on the funding needs of the client. The following are representative examples (see also the tab “Investor Packages”):
Click on the respective funding name (green) to download.
Bloom Associates Short-Term Notes
These notes were being issued for the purchase of medical receivables with a term of less-than 30 months. Sizes from $25,000.
Heart-Quarry Camp: Short-Term Construction Loan
For "Option A", the investor would fund the construction build-out of the hospitality facility which, upon completion and initial operations, would be replaced with bank funding.
Heart-Quarry Camp: 7-Year Loan - Profit Share vs. Interest
For "Option B", the investor would fund the construction build-out of the hospitality facility and, to reduce payment risks to the project sponsor, the investor was given a very high (50%) profit participation. There was refinancing of the investment after 7 years to return capital to the investor.
Heart-Quarry Camp: 15 Year Loan - Interest + Amortization
For "Option C", the investor would fund the construction build-out of the hospitality facility and we delay the start of interest payments by one year and in the last two years, increase the amount of principal from a flat $100,000 per year in the other years. Full amortization after year 15.
Real Estate Developer Working Capital Fund Notes ($ 5 million)
As part of a business plan for a start-up real estate developer, SCPV, LLC, it was determined that a five million dollar, 5-year Working Capital Fund would be advantageous. The capital will be used to acquire development projects, which will then be syndicated to investors through Reg. D private placements.
This term sheet is also being presented to EB 5 investors.
Bloom Associates Cumulative Preferred
A total of $700,000 was being raised with a minimum investment of $50,000 in staged investments.
Heart-Quarry Camp: Interest + Profit + Sale Proceeds Share (15 Years)
For "Option D", the investor would fund the construction build-out of the hospitality facility and is entitled to both a basic interest payment + share of both annual profits and sale proceeds in Year 15. To assess the impact of cap rates on these returns, two cap rate scenarios were run.
There is a also an extensive Appendix offering ideas on other investor options.
ALA Seed Fund - Convertible Preferred
A total of $250,000 was sought be a new real estate development firm. Strong investor preferences and upside were provided. It was expected that the Seed Fund investor would also be interested in investing in the accompanying Working Capital Fund.
The idea was that the Seed Fund would be in the 'risk' part of the investor's portfolio and the Working Capital Fund part of the investor's 'income' portfolio allocation.
Heart Quarry - Funding Options Concepts Discussion
This Appendix to the related Business Plan for the Heart Quarry Camp tried to provide the sponsor with a broad overview of the many different ways he could finance and bring in partners for this project.
The discussion is broken down into the following basic sections, each with numerous subheadings:
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Partner / Investor Options – the Funding Driver
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Basic Funding Options
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Types of Funding Options
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Exit Strategies
Pre-Seed Round - $600,000 - 2 Options (Br... Ch...)
Br... Ch... was a company based on the LinkedIn model, which involved an expansion of an existing related business by a proven new business start-up entrepreneur.
In working with the company, there were a number of options explored. The most aggressive option was one in which an equity kicker was provided to investors but no equity. A number of valuations and returns were projected using the below "Equity Participation" template model.
The Equity Kicker goal was to give investors a low-risk IRR in the 25-30% range based on the takeout value of the company (within a 5-10 year liquidation event planned).
The other Term Sheet shown below was for a standard "Convertible Note" for an S-Corp.
HQC - Funding Term Sheet Overview
This document summarizes the investor funding options, which are separately presented above, and was put together as a separate handout.
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