11 Term sheets: An institutional investor wants to invest in you

 

This chapter covers

  • Unlocking a VC investment—what will it take to see a term sheet from them?
  • What are all these terms in the term sheet, and how do you make sense of them?
  • Difficult and maybe harmful terms—can you spot such deal-breakers in time?

After you have been operating self-funded, or friends-and-family funded, or maybe individual-angel-funded, your next step is an institutional round. You should have the following in place and feel good about them:

11.1 Your first institutional investor term sheet

11.1.1 A clean, standard seed financing term sheet

11.2 Problematic terms

11.3 Terms in follow-on rounds

11.4 The moral of this anecdote