Term sheets

Key takeaways

• Use SAFEs for speed at angel/pre-seed; notes or priced at seed+
• Cap/discount define conversion price; board/protections appear in priced rounds
• Have metrics, use of funds, and cap table ready before negotiating

What a term sheet is

A short, non-binding summary of deal terms. It frames valuation, economics, and governance before final docs.

• Negotiation tool: sets expectations early
• Depth varies by stage: simpler at angel/pre-seed, detailed by Series A
• Final documents reflect this, not invent new terms

How it shifts by stage

• Angel / Pre-Seed: often SAFE; optimize for speed and clarity.
• Seed: SAFEs with cap/discount, or notes with maturity/interest.
• Series A: priced equity with standard protections and board terms.

Go deeper

What to prepare

• Round size, use of funds, target close date
• Latest metrics (MRR, growth, retention), hiring plan
• Cap table and option pool status