Term Sheet Quick Cards
Recall the purpose of core venture financing terms before reviewing a term sheet.
What does pre-money valuation control in a priced round? It helps determine the price per share and how much ownership new money receives before post-closing adjustments. Always check option-pool and convertible-security treatment before trusting the headline. Pre-money option pool versus post-money option pool Ask where the pool sits before saying the valuation is attractive. What does 1x non-participating liquidation preference mean? Preferred investors generally choose either their money back first or conversion to common, not both. Model exits where preference is better and where conversion is better. Objection: 'Pro rata is just investor greed.' Pro rata is just investor greed.…
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