How to analyze investment terms?

What is a term sheet?

Termsheet is basically a non-binding, time-bound expression of interest from investors. It usually conveys the most important aspects of the deal including:

- money commitment

- % dilution

- liquidation preferences

- vesting period and more

Investopedia has a very good description of this area:

Term Sheet Definition

The best term sheet is one that aligns with the long-term interests of investors and founders. Read this in-depth piece on Termsheet anatomy:

Term Sheet Templates - Clauses to Look Out For During Negotiation

Here are additional resources on the term sheet.

The Best Term Sheets Align Interests Of Founders And Investors

How to negotiate terms?

If you've read the above article you'd know the importance of various aspects of the term sheet. So if you're not happy with any parts of the deal, you must push back and negotiate better terms. Here is some good information on this topic:

Term Sheets: The Definitive Guide for Entrepreneurs

What is a Shareholder Agreement (SHA)?

Shareholders' Agreement Definition

What is a cap table?