Hey {{first_name|default:there}}, it’s Vadim 👋
Most founders don't think about term sheets until one is staring them in the face.
And when it finally arrives, after months of pitching, relationship-building, and hoping, there's this brief moment of vertigo.
High stakes, unfamiliar language, and suddenly a lot riding on decisions you're not sure you're equipped to make.
Today I want to fix that.
Instead of diving deep into legalese, I’d like to provide you with a high-level mental map that you can use to navigate these conversations - whether it’s with investors, lawyers, board members, your team.. and maybe even with a slightly concerned spouse or family :)
🧭 HERE’S WHAT WE’LL COVER TODAY:
The 3 buckets that drive every term sheet
What to negotiate, what to accept, and what's a red flag
What's different in biotech, and what to watch out for
Bonus: the best free resources and books on this topic
And more!
Let’s dive in!
FOUNDER STORY
Term sheet vertigo
You've been working on this for years.
The sleepless nights in the lab. The grant rejections. The pivots.
Pitch after pitch after pitch. And then, one day, it happens - an investor says yes. A term sheet lands in your inbox.
For about 30 seconds, you feel pure joy and relief.
Then you open the document.
Liquidation preference. Broad-based weighted average anti-dilution. Protective provisions. Pro rata rights. Drag-along.
And just like that, the joy starts mixing with something else.
Confusion. A low-grade anxiety you can't quite name.
Because on one hand, this is everything you've been working toward.
On the other hand, you're staring at a document that will define the terms of your relationship with this investor for the next decade - and you're not entirely sure what you're agreeing to.
And here’s what makes this even harder - term sheets are genuinely sensitive documents.
You can't just post your term sheet in a founder Slack and crowdsource opinions.
You can't easily ask a peer because chances are, they haven't been through more than one term sheet themselves, and even if they have, this stuff is sensitive.
And while every founder's instinct is to call a lawyer, the reality is that a truly great startup attorney is expensive, hard to access, and often unavailable in the compressed timeline you're working with.
So, what do most first-time founders do? They trust the process. They assume the terms are standard. They sign.
Sometimes that works out fine. Sometimes it doesn't.
What I want to give you today isn't a substitute for good legal counsel - you should absolutely get that.
What I want to give you is a mental map. A way to walk into that conversation knowing what you're looking at, what's negotiable, and what actually matters.
Now, term sheets are a legitimately complex topic.
You could write a whole book about them. Several people have, and I'll link to the best ones at the end.
But that's not what today's issue is about.
My goal today is the opposite: to give you a simple framework for understanding term sheets that you can carry with you wherever you go.
My goal is that after a few minutes of reading this over your morning coffee, you should have a mental map that makes term sheets feel tangible instead of intimidating.
Ambitious? Maybe.
Possible? Let’s read on and find out :)