byFounders' Guide to the Term Sheet

What you should know at seed stage

Being presented with a term sheet can be an emotional experience. That emotion can be excitement about what is perhaps the first firm commitment received from an investor ever. Or it can be a sense of relief, as demanding fundraising efforts seem to come to fruition. Indeed, in some cases, a wave of anxiety as you glance over the terms and become unsure as to what really matters.

Fret not, there have been countless guides written about how to negotiate your term sheet — and we are not going to repeat that great advice. Our recommendation is to start with Brad Feld and Jason Mendelson’s classic: Venture Deals. Its subtitle “Be Smarter Than Your Lawyer and Venture Capitalist” is spot on.

Nevertheless, in the spirit of transparency, we wanted to share our Term Sheet and our thoughts behind some of the clauses we deem most important. We recently spilled the beans about what makes up the byFounders' Secret Sauce: access to top-notch operational expertise, our global network, and a founder-friendly core. The latter is so ubiquitous these days, however, that without concrete facts to back them up, such claims become dull clichés.

As such, the time has come to lift the veil off the most tangible feature founders can use to assess the degree of a VC’s founder friendliness: the Term Sheet.

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