Sweden’s first Term Sheet battle was held Thursday March 1st 2012, at Moll Wendén Law Firm. The room was packed with entrepreneurs and investors from southern Sweden as well as Copenhagen when the live negotiation began.
David Klose, lawyer and partner at Moll Wendén, opened the floor and told the audience about the firm’s involvements for entrepreneurs in the region through the cooperation’s with the incubators MINC and Medeon and about Moll Wendén’s experience of investment-agreements. The first Term Sheet Battle in Copenhagen was held last fall and it was now possible to organize the event in Malmö thanks to Moll Wenden’s connection with the American lawyer Brad Furber and the organization Startupbootcamp (based in Copenhagen). Other sponsors for the Term Sheet Battle Malmö were MINC and Sunstone Capital.
— A main purpose with this event was to emphasize the importance of creating joint arrangements across Öresund. It is necessary if we want to successfully build a truly competitive startup community, which can attract foreign investors, says David Klose. As a region we have to do this ourselves – no one else will do the job for us.
During 2, 5 hours the audience witnessed a live negotiation. Hampus Jakobsson and Carl Silbersky as entrepreneur and angel investor battled against Jimmy Fussing as the investor. The background was an American investment proposal with the investors’ terms in order to invest in the company. Lead by the director for the evening – Brad Furber –Hampus, Carl and Jimmy discussed their point of views concerning pre- and post-money valuation, tranched proposal and dilution as well as composition of board of directors, protective provisions and drag-along rights. Excitable negotiations were mixed with tricks, humor and the actors’ experiences from real-life negotiations.
David Klose together with Brad Furber pointed out several differences between investments made according to Swedish or US legislation, for instance when it comes to tax-issues.
The audience all agreed as the evening came to a close that it was a great event that they would like to experience again and that they had gained a lot of useful tips.
-Term Sheet Battle Malmö was awesome! A very enjoyable performance by the contenders and great new insights obtained, said Fredrik Carlsson, from Mobenga.
Many from the viewers expressed a need for wanting to learn even more about term sheets and that investment negotiations are more complex than they originally thought.
David Klose summarizes; —This case gave the audience a hint of just how complex a term sheet can be – and that it’s important to get professional help for your negotiation. Naturally the factious term sheet tonight was excessive. And the conditions can probably come across as so complex that it’s frightening for an entrepreneur. But that is also a lesson to be learned if you are working in a region that attracts foreign investors and you want to continue to do so. The point isn’t that you ought to remember all details, but you need to achieve a profounder knowledge about the main issues that always needs to be discussed in any investment agreement, no matter how straight-forward or complex it is, David continues.
In real life Hampus Jakobsson is an angel investor, strategist and one of the founder to TAT (The Astonishing Tribe). He also works at RIM. Carl Silbersky is an angel investor and was former CEO for Polar Rose. Jimmy Fussing is Managing Partner at Sunstone Capital, one of the most influential Venture Capital companies in Scandinavia. They all have great experience of negotiating investment deals with both Swedish and foreign investors.