Financing Term Sheet Deep Dive: An Overview

Whether you’ve only recently decided to seek out capital for your business or have already received (or made) your first offer, the term sheet (or “letter of intent”) is an integral part of the process.  In this series we’ll look to shed some light on the legal language contained in a financing term sheet by taking a “deep dive” into the most often used terms and how choices made in selecting those terms can affect both the Company and the Investor.  

Financing Term Sheet Deep Dive will be published each Monday morning until conclusion. For more information, check out www.hoeglaw.com or drop Rick a line at rhoeg@hoeglaw.com.

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One of the primary times that a client will seek out my advice is when they are faced with reviewing (or drafting) a term sheet for the sale (or purchase) of a company’s stock. For those who have not gone through the process, the notion of a term sheet (a document that lays out the basics of a proposed transaction but not in sufficient detail to actually effect the sale) can seem a little odd or even antiquated.  What good is a document that expressly states that it is “non-binding”, after all?

The easiest answer, like many things in the law, is that offering a term sheet before drafting definitive documents is simply the way things are done.  But, while true, that answer is not only pat (and somewhat unhelpful), it is also incomplete.

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Virtual Legality #47 – Gizmodo Group Sold! What is “Private Equity” Anyway?

With the sale of the Gizmodo Group, some of the Internet’s favorite “blog-style” journalistic hot spots are now in the hands of a little known private equity firm. But if the firm itself is little known, what the sale actually means (or could mean) is even less understood.

What is “private equity”? How does it work? How are funds formed? And how does corporate law and tax regulation inform their creation?

What does this mean for Kotaku, Gizmodo, Jezebel, Deadspin, The Onion, and the rest of the acquisition group?

And why might it not be the doom that some fear, when other private equity targets (such as Toys R Us) fell to bankruptcy shortly after their acquisition?


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Virtual Legality #44 – Kotaku Adds Another Note to Bioware’s Discordant Anthem

Kotaku’s Jason Schreier once again brings us into the world of how the video game sausage gets made, as he dives deep into the tumultuous development history of Bioware’s Anthem.

Why was Anthem’s traversal, gameplay, and even name changed at the last minute?

What forces, both internal and external, led to the release of the lowest rated game in Bioware’s history?

What did Bioware have to say about Kotaku’s article?

And why does Bioware’s messaging on this do more to evidence its communications issues than it does to refute them?

We’ve got a lot to say about this one folks.


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Virtual Legality #38 – Lucasfilm Games, Electronic Arts, and the Future of Star Wars

With new job postings being made by Lucasfilm and Disney to staff up “Lucasfilm Games”, questions abound as to just what role Disney intends to have in the future of Star Wars video game production.

What is Lucasfilm Games, and what do the job postings have to say about the relationship between Disney and licensees like Electronic Arts?

How does an exclusive license to intellectual property (IP) work, when might Disney be able to get out of it, and most importantly, would it even want to?

What is brand management, and why do the job descriptions for the positions at Lucasfilm Games suggest a more robust licensor/licensee relationship rather than the opposite?

And what does it all mean for Star Wars, Indiana Jones, and the rest of the Lucasfilm portfolio?


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Virtual Legality #27-2 Update: Sponsored by EA?

More twists and turns in the continuing story of just what happened to GGGManLives’ Anthem Review!

What does Electronic Arts claim to have happened?

What is the difference between “Game Changers” and “Sponsored” Content?

And why does a video exist with absolutely NO disclosures, if the issue (as claimed by EA) was that EA paid for its creation?

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Game Changer! Did EA force influencer to violate False Advertising Laws?

With reports that content creator “Gggmanlives”, a member of Electronic Arts’ own paid-affiliate “Game Changers” program, was asked to remove EA-identifying watermarks from his negative review of Bioware’s Anthem, controversy surrounding the video game publisher’s use of influencers as de facto arms of its marketing department continues to swirl.

What seems to have actually happened here?

What is the Electronic Arts Game Changers Program?

And if EA actually made this request, why might it have caused itself (and Gggmanlives) many, many more problems?


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The Shoe Head ‘Round the World: Zion Williamson, Nike, and Contract Law

When the best player in the game falls to injury, not by happenstance, but because of the shoe his University contractually obligated him to wear…who is left holding the bag?

What happened to Zion Williamson and his shoe on the night of February 20, 2019?

What happened to Nike’s stock price?

And just what is in those “all-sports” contracts Nike signs with Universities like Duke, anyway?

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Scalebound on Nintendo? IP, Contract, and Trademark Law

Rumors swirl of a long-dead game being revived for Nintendo’s Switch platform, with Microsoft and PlatinumGames’ abandoned Scalebound project leading the guesses.

Could Scalebound actually come to Nintendo’s Switch?

What do intellectual property rights and contract law mean for how such a project might take shape?

And why does an abandoned trademark tell less than half of this particular story?

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