Material adverse change clauses, or MAC, is the one term you do not want to have on your term sheet.
That means the lender can cite a change in the business, change in the business environment, whatever they want because it’s kind of an ambiguous term, and they can declare a default.
Once you’re in default with the lender, that means you got to play by their rules, and they can always force you to a liquidator or pay down the loan. You have to listen to what they say, and do whatever they ask.
Stay out of default, and don’t do a material adverse change in your venture debt term sheet.
19 Feb 2019 - Vanessa Kruze, Founder and CPA
14 Feb 2019 - Vanessa Kruze, Founder and CPA
7 Feb 2019 - Hannah Cole-Leathers, Staff Accountant at Kruze Consulting
30 Jan 2019 - Scott Orn
28 Jan 2019 - Scott Orn