2 Weeks of Term Sheet Romance
Startupbootcamp FinTech Singapore held a Term Sheet Showdown this week — the first of it’s kind in Asia!
For this, we brought together experienced Founders, VCs and Lawyers on stage as the ‘cast’ for an impromptu mock discussion of a ridiculous Seed round term sheet. Writing the ‘play’, was myself - someone who had never once seen a term sheet...
Going down the checklist @ T-2 weeks till our Term Sheet Showdown: Venue? Check. “Panelists”/Cast? Check. Agenda? Check. Mock Term Sheet? Not Checked.
With 2 weeks to go and a show to put on, I couldn’t possibly have left our cast without a Background story and Term Sheet to discuss. So off I went on a major hunt to source Term Sheet Battle Videos, Term Sheet 101s, Term Sheet How tos, Term Sheet Templates — so on and so forth. Several days of videos and stringing together different term sheets later, I had my first draft! After a number of drafts, and heaps of feedback, we finally had our Mock Term Sheet — one that was ridiculously imperfect, and worked perfectly for our negotiation.
Fast forward to Showdown Day, we had 2 VCs: Jasmine Liew (500 Startups) and Nikhil Kapur (Gree Ventures). 2 Entrepreneurs: Michelle Katics (PortfolioQuest) and Rosalind Tan (Adatos). A Lawyer: Chris Wilson (Simmonds Stewart). And Sam Hall (Startupbootcamp), as Moderator/Play Director. The discussion was intense! In a span of 2 hours, we were only able to cover a small fraction of the negotiable terms. If you want to know more about the details of the battle, here is an amazing 7 minute writeup by Nikhil!
[Welcome back] So.. What have I learnt from 2 weeks of eating, sleeping, and living with Term Sheets?
- Information is abundant— you just need to look hard enough and you’ll find that there are heaps of useful material. And..
- When you think you know enough, you don’t— while I learnt a lot through the time spent on reading, listening, and watching, there is still a lot that I don’t understand. So..
- Ask an expert — speak to someone who knows this stuff. You can read all you want, but the moment I sat down in a room with all the ‘panelists’ we invited, my understanding of the term sheet simply escalated. The what, the why, the how. More often than not, people are willing to share if you ask!
- Every term is there for a reason — investors don’t put terms in there for the sake of it. There is always an underlying reason and you need to understand why they are there.
- Keep your negotiation focused — when heading to your term sheet negotiation, don’t expect to negotiate everything from line 1 to 100. Have 3 key items you want to speak about and stick to them. This will help to keep the conversation focused.
See you at our next Term Sheet Showdown!