Term sheets are complicated. Endeavor’s Center for High-Impact Entrepreneurship built the tool below to help entrepreneurs receiving their first VC investments understand how changes to certain parts of a contract can radically alter how entrepreneurs and investors will share the money made on the sale of a company.
However, you don’t have to take our word on why this is important. As the chief counsel of one our early entrepreneurs has said, “Not understanding this stuff – liquidation preferences, participation, etc. – cost our team about $100M when we sold the company!”
|Founders and other current shareholders|
|Employees (option pool)|
|Series A Investor|