Venture Capital Term Sheet

What Venture Capital Investors Want in a Term Sheet

A term sheet is a document outlining the basic conditions and material guidelines for a business agreement. The venture capital term sheet is key because it establishes the venture capital firm's involvement in the company and covers the shares and expected returns for the investors. This short venture capital video covers some of what venture capitalists want and do not want in a term sheet:



The first speaker, an angel investor, talks about the control issue. He says that the most important thing he looks for in a term sheet is some kind of control through either a board position or observer rights. A venture capitalist says that valuation is most important because he primarily wants to make good returns on his investments. The second venture capitalist shares a structural problem that he does not want to see in a term sheet. He does not want convertible differed with a discount to the next round because it hopes that the company does not do too well too early.

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