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Anonymous

Hey I am on Medial • 1y

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

Anonymous

Hey I am on Medial • 1y

11. Control Over Intellectual Property Ensure clauses don’t give investors undue control over IP, especially in case of disputes or liquidation. 12. No-Shop Clause A clause preventing you from negotiating with other investors after signing the term sheet. Limit the duration to a reasonable period (e.g., 30-45 days). 13. Founder Roles and Employment Terms regarding your continued employment as a founder. Ensure the terms are fair and protect you from being sidelined or replaced easily. 14. Pay-to-Play Requires investors to participate in future rounds to retain certain rights. While this can protect you, ensure it doesn't backfire during tough fundraising rounds. 15. Confidentiality and Non-Compete Non-compete clauses should not overly restrict your ability to work in the industry if things don’t work out. How to Protect Yourself 1. Hire a Lawyer 2. Negotiate Understand the Implications: Know how each term impacts the company’s valuation, governance, and your own future.

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Anonymous

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✨ ENTREPRENEURS IQ TEST ✨ In the context of venture capital, which term describes a contractual clause that allows investors to protect their investment by requiring the startup to grant them the option to purchase additional shares at a discounted

Drag-Along Rights

Liquidation Preference

Conversion Rights

Anti-Dilution Provision

Votes: 9

1 Reply

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