The article provides a guide to venture capital (VC) term sheets, which are the blueprints for investment deals. Term sheets are not legally binding promises to invest, but they outline the terms and conditions of the investment. The article emphasizes the importance of due diligence in evaluating potential investors and recommends focusing on the key terms that are most important to your business. It highlights ten common terms found in VC term sheets, including money raised, pre-money valuation, liquidation preferences, conversion to common stock, anti-dilution provisions, boardroom makeup, dividends, voting rights, and drag-along provisions. The article also offers tips on negotiating a fair term sheet, such as working with trusted advisors, prioritizing important issues, and seeking multiple VC options for better negotiation leverage. Ultimately, negotiating a fair term sheet requires a good understanding of the terms and a reasonable approach to strike a mutually beneficial deal.
Venture Capital Term Sheets: A Guide BY VANESSA KUHLOR
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