Chapter 3 · Deal Mechanics

Term Sheets End-to-End

A term sheet is a two-page document that settles how much a company is worth, who has control, who gets paid first if things go wrong, and what the founders can and can't do without the board's permission. We'll walk through the economics (valuation, option pool, liquidation preference, anti-dilution) and the control terms (board composition, protective provisions, drag-along, tag-along). You don't need to be negotiating these yet. You just need to be able to read one without getting lost.