Term Sheet

“If you just go take the first term sheet, Getting around done will actually take longer because there's no alternatives. You don't have alternatives. And then it gets weird. And then the VC will just keep pushing, pushing, pushing, pushing, getting more, more,…”

“So if you want three term sheets, you're going to need to get 10 firms to that final stage where all partners review the opportunity. So that 30% of those actually get you a term sheet. Now, if you want 10 partner meetings, that means you're gonna have to have…”

“I have negotiated one term sheet in a sauna with the founder. It's a great idea, because, especially if they're not used to the sauna, because you have the edge. You can just keep cranking it up.”

“It honestly, from starting the yeah, from starting sort of formal, you know, pitches and conversations to signing a term, she was about 10 days.”

“Be the best of breed, you'll get five term sheets. You really will.”

“I think it's fair to give on valuation.”

“The investor who's giving you that term sheet wants to preempt it. They want to get in early. They want to get a better price, and so they know that if they do it before you're getting information from everyone else, that's going to help them.”

“I think a great founder will take a 20%, will take a 20% lower or delta term sheet to work with a high, someone they really want to work with. Beyond 20, I think it may be mythical.”

“At Offline, we've actually started writing it into our term sheets and, you know, it should be something that you care about, and we just, as a narrative, we haven't actually talked about it that way in the Valley.”

“We had two term sheets last year, both of which vaporized as the markets that degraded”

“Fabrice Grinder, he often do a deal just by one hour call, or even shorter, and he commit, and he admitted that I think his first Android term sheet, he didn't read anything. He just signed.”

“I think the point where this is, you know, the most, the biggest threat that this happens, if you are looking at a company and you are in a due diligence process and you are not essentially have not signed the term sheet yet, or you have not essentially like s…”

“From an investor point of view, a term sheet sign is not a deal done. We continue to do our due diligence up to the last day, and the entire negotiation process with a founder on the terms is a, like the most revealing of all due diligence”

“And LOI and term sheets are nothing but just, whatever you think, just write it down. It's not that complicated. Just write down, like, okay, this is how much I'm gonna pay right now, this is how much I'll pay in the future, and so on and so forth.”

“Anytime investors give you term sheets, sort of everything is negotiable. There are standard kind of boilerplate term sheets that are, you know, this is the types of shares they get. These are the voting rights they get. These are their pro rata rights, all th…”

“The most non-obvious clause to negotiate is the amount that you're supposed to reimburse the investor's legal counsel. You're actually doing your investors a favor by negotiating this. This is an actual win-win to negotiate. The time it takes you to go from te…”

“I've, I have friends who had term sheets for massive rounds of financing just evaporate”

“I've seen early stage valuations drop by about 20 to 30%, and I've even seen some term sheets being pulled from deals”

“Our total fundraise process to go from first coffee meeting to term sheet was nine days.”

“You can be tempted to say, oh, well, we have this other time sheet. We have this other offer, blah, blah, blah. Just don't ever do that because it's so small as a community and just be honest.”

“Like, if you have a great product and great traction, then you have a hot deal, and like, any other kind of justification as to why you're not getting term sheet is, you can't really say that. Like, you either have product market fit and a hot deal, and that's…”

“And I know that the best way to get a term sheet is a very warm introduction from a portfolio company, right? I mean, this is the best way.”

“It's a term sheet is, unfortunately, not binding. It's a indication of interest that's really a buildup of good faith, and so you could do it and get away with it, absolutely, and it happened a lot in, you know, in the late nineties when you didn't have online…”

“And usually the closing option pool, which is negotiated as part of the term sheets negotiations, it usually is around 10% of the post round shares.”

“Next thing is that the safes convert into shares, and although the safes themselves don't, ah, state this, the term sheet will usually specify that the safes convert in the pre-money.”

“When I give people a term sheet, I say, go shop it. It's not going to explode. I only want you to work with us because we're the best choice for you, not because I've put you under some time pressure.”