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.

Just submit an enquiry via this page or click the 'get started' button on our website to submit an enquiry. After you've submitted an enquiry, one of our legal consultants will review your enquiry within 1 business day and get in touch to get a better idea of exactly what you are looking for.

Then your legal consultant will send through an email with a bit more information about the services you need, along with a fixed fee quote setting out costs, scope of the service and timing. Have a read through it, and if you're happy with the scope, you can accept and sign our engagement letter online - easy!

Once you've formally accepted, we'll connect you with a specialist lawyer and they will work with you to complete your project. They will contact you by email or phone if they need to get in touch.

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 operate completely online, which means we can help you wherever you are in New Zealand. We have office spaces in Sydney, and in Melbourne, but our use of technology allows our team members to work remotely from around the world. Our legal team are mostly based in Sydney, Melbourne, Brisbane and Perth. We also have a London office for Sprintlaw UK.

Our legal team is made up of experienced lawyers, who are specialists in various areas of law and hold an Australian legal practising certificate. None of our Sprintlaw lawyers are New Zealand qualified lawyers and they do not currently hold a New Zealand practising certificate.

They provide legal services working remotely from Australia via our 'legal consultancy' model, through which (under section 6 and section 35 of the New Zealand Lawyers and Conveyancers Act 2006) our Australian legal team are permitted to provide legal services to New Zealand businesses provided they do not provide services in certain 'reserved' areas of law. You can read our FAQ page to learn a bit more about our 'legal consultancy' model.

Given the strong similarities between Australian and New Zealand law, and the areas of law in which we practice (being small business and startup law), we do not view the fact that our lawyers have not qualified in New Zealand as having any substantive impact on the quality of our service. We are committed to ensuring that we provide high quality, affordable legal services to all our New Zealand clients.

Our legal team have all trained at leading firms, but have left the traditional corporate law world to join us on our mission to create a new and better way of delivering legal services. They have specialist expertise in technology law, intellectual property law, contract drafting and review, corporate law and commercial law.