Term Sheet: Restriction on Sales, Proprietary Inventions, and Co-Sale Agreement

Management / founders rarely argue against a Restriction on Sales Clause as it helps control the shareholder base of the company which usually benefits all the existing shareholders (except possibly the one who wants to bail out of their private stock.) A proprietary information and invention clause benefits both the company and investors and is simply a mechanism that investors use to get the company to legally stand behind the representation that it owns its intellectual property. Finally, a co-sale agreement is pretty standard fare as well.

 

(Full Post: http://www.feld.com/wp/archives/2005/07/term-sheet-restriction-on-sales-proprietary-inventions-and-co-sale-agreement.html


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Brad Feld

Brad Feld has been an early stage investor and entrepreneur since 1987. He is currently a Managing Director at Foundry Group. Prior to co-founding Foundry Group, he co-founded Mobius Venture Capital and, prior to that, founded Intensity Ventures. Brad is also a co-founder of TechStars.

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Filed Under:
Collection: Funding
Category: Term Sheet Terms