- Source link: https://www.cooleygo.com/negotiating-term-sheets/
- TL;DR: Focus on 3 key issues in your term sheet negotiations
- How helpful?: 4/5
- Topic Tags: negotiation, term sheet, rule of 3
- Relevant questions addressed:
- Where should I focus my efforts in a term sheet negotiation?
- Summary bullet points
- Follow the “rule of 3”
- Focus your energies on 3 key issues to negotiate
- If you accept the term sheet “as is” without negotiating, you might actually lose credibility with the VC. This doesn’t mean you should endlessly argue, though.
- Show the VC that you will stand up for the important issues, and that you know what the important issues are
- What are the important issues?
- Valuation/Dilution
- Liquidation preference
- Makeup of BoD
- Protective provisions
- Founder vesting
- Antidilution protection
- Exclusivity
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