Term Sheet Checklist
Walk a term sheet term by term — economics, control, and red flags — so you negotiate the three terms that matter instead of all thirty.
Cover at least: valuation, option pool size and timing, liquidation preference, anti-dilution. Market norm for early rounds is a 1x non-participating preference and broad-based weighted-average anti-dilution.
Cover: board composition, protective provisions, pro rata rights, drag-along, founder vesting.
Common ones: >1x or participating preference, full-ratchet anti-dilution, investor board control at seed, unusually large pool top-ups, tranched investment tied to vague milestones.
You can't fight every term. Which three move the outcome most, and what's your position on each?
A term sheet is mostly non-binding, but exclusivity and confidentiality usually bind. Every real term sheet deserves startup counsel — budget for it.
Term Sheet Checklist
Deal:
Economics
Control
Red flags checked
Negotiation priorities
Questions for counsel
The read
Note: educational checklist, not legal advice. Engage a startup lawyer before signing anything — including the term sheet itself, since exclusivity provisions typically bind.