[MUSIC] This week, we will talk about the venture capital term sheet and valuation of a company. So in the last week, I told you that the target for seller should be to receive multiple term sheets at the same time. Term sheet is a letter of intent or memorandum of understanding, and it's a basic agreement on the terms of transactions. Finding and meeting investors can be its own special challenge, but once you do and you start talking terms sheets, what can you expect? What is most often negotiable and what are the non-starters?

[SAMPLE TERM SHEET] CONFIDENTIAL EXHIBIT A May 1, 2000 Project Target Senior Secured Credit Facilities Summary of Principal Terms and Conditions Borrower: A newly formed Delaware corporation (the" Borrower ") that will purchase all the capital stock of Widget Corporation, a Delaware corporation (the" Target "). The Borrower will be a wholly owned