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By "far end" I mean after the round is executed and some time has passed.

Do term sheets typically state what happens if agreed upon milestones are not met?

  • are there ever claw back provisions on the money?
  • are there typically other provisions set which protect the VC against money blown by the startup due to poor decisions (as opposed to appropriate bets and risks) by the founders?
  • other?
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There can be claw backs if certain milestones are not met. The typical claw back usually revolves around making revenue targets in later stages.

VC's typically will traunch money when milestones are completed. That way, they don't have to claw it all back.

Those two conditions are the only ones that I am familiar with.

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+1 on all this. Typically it's not based on deliverables, and typically if there are provisions you just don't get the money in the first place. – Jason May 5 '10 at 14:28

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