Check the lender terms before venture debt locks in

Venture debt usually introduces lender controls that can bite later, even where the initial funding looks straightforward. Instead of focusing mainly on valuation and equity rights, these term sheets often deal with repayment structure, financial or operational covenants, security, default events, information undertakings, warrant rights and lender consent points. That means the risk profile can be very different from an equity raise. A review helps you understand not just the cost of capital, but how much room the lender will have to influence decisions if trading conditions change or another funding round is needed.

The short answer is that the pressure points are usually the clauses that restrict flexibility. Common examples include broad default triggers, aggressive reporting obligations, negative covenants that limit future borrowing or asset dealings, security over core business assets, cash sweep concepts, founder undertakings, and warrant or equity-linked features that are easy to overlook. We review how those clauses operate together and explain where a term may be commercially manageable versus where it could create leverage for the lender at a difficult time. That context matters more than reading each clause in isolation.

We review the venture debt term sheet itself and provide written advice on the main legal and commercial issues it raises. That commonly includes comments on pricing structure, repayment mechanics, security position, covenants, events of default, lender rights, warrant features, conditions precedent and any unusual founder or investor obligations. The service also includes a consultation with a New Zealand lawyer to discuss the findings and likely next steps. It does not automatically include negotiation with the lender, review of all finance documents, or ongoing representation after the initial advice.

Yes, we can review a term sheet issued by an overseas lender and explain the New Zealand-facing issues we can identify from the document. In practice, overseas forms sometimes include assumptions, enforcement concepts or market positions that need closer scrutiny before they are accepted in a local transaction. Where a point turns on foreign law, offshore enforcement, or cross-border structuring, we may recommend additional specialist input. Our role here is to help you understand the document you have been given and flag where the deal may need broader advice beyond this fixed-fee review.

If the lender moves ahead, the next stage often involves longer-form finance documents, security documents, board approvals and closing steps. Depending on the deal, there may also be questions about how the debt interacts with existing investor rights or other financing arrangements. We can discuss further support if you need it, but that work sits outside this initial review. The purpose of this service is to help you assess the proposed venture debt terms early, before the transaction becomes harder to reshape and before the detailed documents consume more time and cost.

Submit an enquiry on this page or click 'Get started'. One of our legal consultants will review it within 1 business day and get in touch to understand what you need.

Your consultant will then email you a fixed-fee quote setting out the cost, scope and timing. If you're happy with it, you can accept the quote and sign our engagement letter online.

Once you've accepted, one of our Australian-qualified lawyers will work with you to complete your project. They'll contact you by email or phone if they need anything.

Sprintlaw works on fixed-fee pricing wherever possible, so you can review the scope and cost before you decide whether to proceed. For the Venture Debt Term Sheet Review service, pricing starts from $900.00.

After you enquire, a legal consultant will confirm what is included, the expected timing and whether any extra work is needed before you engage us.

We work online, so we can help wherever you are in New Zealand. Our team works remotely, mainly from Australia.

Your work is done by our Australian-qualified lawyers, who hold Australian practising certificates and specialise in business law. None of them are New Zealand lawyers or hold a New Zealand practising certificate.

Sprintlaw NZ Limited is a legal consultancy, not a law firm, and is not regulated by the New Zealand Law Society. We don't act in court or tribunal matters, conveyancing (including leases and business sales) or other reserved areas of work. Communications with Sprintlaw are unlikely to be protected by legal professional privilege. We still keep everything confidential under our engagement letter.