Term Sheet Clinic Episode 1
SeedLegals
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Term Sheet Clinic Episode 1
2 904 просмотра · 5 л. назад
SeedLegals
1,05 тыс. подписчиков
2 904 просмотра · 5 л. назад
In this episode of Term Sheet Clinic, Anthony Rose from SeedLegals explains how founders should read and negotiate an investor term sheet.
Because real term sheets are confidential, SeedLegals created a realistic sample term sheet from a fictional investor, Helpful Ventures, investing £500,000 into a typical seed round. Anthony walks through the key clauses founders need to understand before signing, including valuation, share class, liquidation preferences, option pools, investor consent, founder vesting, drag-along and tag-along rights, leaver provisions, warranties, exclusivity, legal fees and more.
The episode explains what’s standard, what’s negotiable, and which terms could create problems for founders later. It’s especially useful if you’re raising a seed round, preparing to negotiate with investors, or trying to understand the difference between angel-friendly terms and VC-style terms.
Read the SeedLegals Term Sheet Clinic guide:
https://seedlegals.com/resources/seed...
Chapters:
00:00 Introduction to Term Sheet Clinic
00:35 Why term sheets are usually confidential
01:10 Creating a sample term sheet from Helpful Ventures
01:55 How UK founders use SeedLegals for term sheets
02:45 Investment amount and valuation
03:25 Pre-money vs post-money valuation
04:10 Total raise size and investor commitment
04:55 Share classes: ordinary shares vs preference shares
06:00 Liquidation preferences explained
07:15 Participating vs non-participating preference shares
08:05 1x vs 2x liquidation preference
08:45 Option pools and founder dilution
10:05 Investor directors and board control
11:50 Investor majority and consent rights
13:05 Which decisions should need investor consent
14:40 Founder vesting explained
15:55 Three-year vesting vs four-year vesting with a cliff
17:25 Drag-along rights
18:50 Tag-along and co-sale rights
20:05 Pre-emption rights and future funding rounds
21:25 Information rights and investor updates
22:35 Founder salaries
23:40 Leaver provisions: good leaver, bad leaver and forced leaver
25:35 Fair value and founder share buybacks
26:35 Share transfer restrictions
27:35 Warranties and founder liability
29:05 Dividend policy
29:25 Arrangement fees
30:20 Exclusivity and no-shop periods
31:45 Key person insurance and D&O insurance
32:40 Investor legal fees
33:35 Signing deadlines and negotiation pressure
34:30 Final advice: everything is negotiable
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