Venture Capital Deal Terms: A Guide To Negotiat... File

: A typical balanced board for early stages might be 2-2-1 (2 founders, 2 investors, 1 independent).

: Aim for 1x non-participating preferred . This ensures investors get their initial investment back before common shareholders, but not "double dip". Venture Capital Deal Terms: A guide to negotiat...

: Use cap table modeling to see how different liquidation preferences affect your actual payout at different exit prices (e.g., a $50M exit vs. a $500M exit). : A typical balanced board for early stages

: These are veto rights for investors on specific actions like selling the company or issuing new debt. Ensure these do not hinder day-to-day operations. Founder Vesting & Commitments : Use cap table modeling to see how

: This exclusivity period (usually 30–45 days) prevents you from talking to other investors. Do not sign it until you are confident in the lead investor's commitment.

: A high valuation with restrictive terms (like high liquidation multiples) can be worth less than a lower valuation with founder-friendly terms.

: Avoid this where possible; it allows investors to get their money back plus share in the remaining proceeds, significantly reducing founder payouts. Governance and Control