When founders are offered a term sheet by a VC fund, they are in a rush to close the deal as soon as possible and start using the funds. So, should they go ahead and sign the term sheet? Of course, yes. But they should first understand the terminology used in the term sheet and how it impacts the startup, its founders and the VC fund. We have tried to explain the meaning of some important jargons stated in the term sheet, their importance and legal implications. Founders would do well to read through the term sheet carefully, understand the legal implications and negotiate to achieve a balanced position.
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