Term Sheet Overview: Guide to Understanding and Negotiating Term Sheets

Term Sheet Overview: What it is and when it is used

Most Common Clauses

Economics of Term Sheets by A16Z

Capitalization Table

Valuation

Term Sheet Valuation

Some basic terms related to valuation are:

Security types

Most Common Mistakes in Term Sheet

Top Three Mistakes Startup Founders Make

The impact of share preferences on common shareholders

Other deal sweeteners for bridging valuation gaps

Losing the balance of power through the protective provision

Prolonged due diligence periods

Investor is not contributing

How to Negotiate a Term Sheet

How to Negotiate a Term Sheet Video

Commonly Asked Term Sheet Questions

Do both parties have sufficient capital to support 6 months delay in the business plan?

How quickly can you execute the transaction in light of changing market conditions and depleting funds?

How soon will the investors get a return on their money and will the returns percentage be ratable?

What will happen if more rounds of financing are needed? Will it be possible to add in a new investor to the company?

How interested are the new investors in the board structure and how much control will they have over the decision-making?

If the investors want to exit how can they exit their investment and at what rates and terms?

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