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Have you all come across this wordcalled "Term-Sheet" Whenever you see someone raising funds or you yourself raising funds, but what actually is a Term Sheet ? 📄 Basically term sheet is a kind of agreement made between start-up and investors that points out the key terms and conditions of the investment. You should consider it as draft of agreement before legal proceedings begin or legal contracts are signed. ( SHA/SSA/SPA ) Is it really Important ❓ Gotta ask Niket Raj Dwivedi or Harsh Dwivedi , Jokes aside But yea it is important, Wanna know why is it important ? Here you go 🔏 It will have all the terms stating who will control what, what will happen if the things go right, what will happen even if the things go wrong. Everything will be specified in that, How much percentage of equity will you have and how much will investors have etc.., It is also said that A bad term sheet can ruin your start-up even before you try to scale. ( Experienced people can give your opinion on it ) 🛠 The main key features and mentions of term sheet would be : 💸 Valuation (Pre & Post-Money) How much your startup is worth before and after the money comes in. ( Depends on each stage of funding ) 📊 Equity Stake How much ownership you're giving up to investors and how much will your team will hold. 📈📉 Liquidation Preference Who gets paid first (and how much) if the company is sold or shut down. ( No matter good or bad, it have to be mentioned ) 🏢 Board Structure ( Board in the sense board of directors in a company ) Not a black board or green 🤪 Who gets a seat at the table to make decisions. 🔏 Founder Vesting What if a co-founder leaves? What will happen to that vacant place ? What will be done later. 📞 Drag-Along & Tag-Along Rights What if you wanna sell and others don't wanna sell ? 🧩 How to see it as a Founder / Aspiring founder. ✅ Never sign it emotionally or in a rush thinking you got your funding. ✅ Consult a lawyer / ask suggestions of fellow founder / talk to your family who handles or know about business. ✅ If it doesn't fit in your terms try to negotiate respectfully. The main points of negotiations are in controls and liquidation part. ✅ You can use your Term-Sheet as YC tag too 🤣, saying that i have received a term sheet, just a joke not as valuable as YC tag but yea it can used to leverage with other investors (there's a saying that once you get one term sheet, others often follow). 🎯 What Founders Should Learn: The valuation is sexy, but the terms are what really matter. 🧳💸 You’re not just raising money — you’re entering a long-term relationship with your investors ( If relationship is ruined life is ruined, not only in love even in business 😪 ) 🗞️ Term sheets reveal investor intent: Are they founder-friendly? Exit-obsessed? Controlling? 🫠 A bad term sheet today can destroy your startup 2 years from now. Question for Founder who have already raised funds: What’s one term you regret not negotiating ❓ *This Post adhers to all community guidelines* *The image used below is property of Investopedia sourced by Google images* * The content is sourced by web and based on own knowledge, not everything might be correct and professional always seek professionals while deciding or finalizing a term sheet*