Demystifying the VC term sheet: Pay-to-play provisions

For the past couple of months, I’ve been exploring some of the more confusing terminology of VC term sheets. In my last post http://venturebeat.com/2011/04/25/demystifying-the-vc-term-sheet-drag-along-provisions/ , I discussed "drag-along" or "bring-along" provisions, which grant to the investors the right to compel the founders and other stockholders to vote in favor of (or otherwise agree to) the sale, merger or other "deemed liquidation" of the company. In today’s post I examine so-called "pay-to-play" provisions, which can be an important protection for the company.

Scott Edward Walker

Full Story: http://venturebeat.com/2011/05/09/demystifying-the-vc-term-sheet-pay-to-play-provisions/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+Venturebeat+%28VentureBeat%29