Bvca Term Sheet

Strictly private and confidential

Not to be disclosed or distributed to third parties

Draft ●

Indicative Term Sheet

[For use on Series A round]

We are pleased to present our proposal for an investment in ● (the "Company").

Investment

1 You have told us that the proposed business plan calls for an equity injection of £● . Of this amount, funds managed by us (the "Funds") will provide £● alongside investment by other venture capital funds or financial institutions (together the "Investors"). We will act as lead equity investor.

2 The investment will be at a fully diluted pre-money valuation of £● , including employee share options (both granted or committed) equal to ●% of the fully diluted equity. The investment will represent a ●% shareholding for the Investors on a fully diluted basis, following an expansion of the share option pool as detailed in paragraph 2.4. The current capitalisation of the Company is set out in Part I of Appendix 1 and the capitalisation of the Company after this proposed funding is set out in Part 2 of Appendix 1.

3 The investment will be made in the form of convertible participating [redeemable] preferred shares ("Preferred Shares") at a price of £● per Preferred Share (the "Original Issue Price") the terms of which are set out in Appendix 2.

4 [The investment will be made in full at completion.]/

[The investment will be staged with ●% being invested at completion (the "First Tranche") and ●% being invested subsequently (the "Second Tranche"). [The Investors will have the right, but not the obligation, to subscribe for the Second Tranche at the same price per share as the First Tranche at any time.] [Provided that the performance milestones referred to in paragraph 2.6 have been met, the board of directors of the Company (the "Board") will have the right to call the Second Tranche within ● months of the performance milestones being satisfied.]

5 The proceeds from the investment...