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Venture Capital (VC) term sheets often include clauses that can have significant implications for founders and the future of their startups. Below are some critical clauses that founders should carefully evaluate: 1. Valuation and Equity Pre-Money

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Anonymous

Hey I am on Medial • 4m

3. Board Composition Ensure a fair balance between founder representation and investor control on the board. Limit clauses that allow investors to unilaterally appoint directors or have veto rights over key decisions. 4. Founder Vesting/Cliffs Re-vesting of founder equity is often proposed. Understand vesting schedules, cliffs, and any potential risk of losing shares if you exit prematurely. --- 5. Anti-Dilution Protection Full Ratchet vs. Weighted Average: Full ratchet protection can significantly dilute founders in future down rounds. Aim for a "broad-based weighted average" clause to minimize dilution risks.

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