Business
Explicateur de clauses de term sheet
A term sheet clause explainer translates the dense, founder-critical clauses of a startup term sheet into plain language. Pick a clause — liquidation preference, anti-dilution, the option pool, board composition, or vesting — and it explains what the term means, why it matters, and which variations favour founders versus investors. First-time founders use it to walk into a fundraise understanding what they are signing, and anyone learning venture financing uses it to demystify the jargon. Term sheets decide control and economics for years, and a single clause can dramatically change what founders keep in an exit. Use the explainer to grasp the concept and the right questions to ask, then have a startup lawyer review the actual document. This is an educational explainer, not legal advice — real term sheets always warrant professional counsel.
How to use
- Choose your options above
- Click Generate
- Copy your result
Detailed instructions
- Select the term sheet clause.
- Click Generate to read a plain-language explainer.
- Note the questions it suggests asking.
- Have a startup lawyer review the real document.
Use Cases
- •Understanding a term sheet before a fundraise
- •Learning venture financing jargon
- •Preparing questions for an investor negotiation
- •Demystifying founder-versus-investor terms
- •Teaching startup finance basics
Tips
- →Always ask how a term behaves in a bad exit, not just a good one.
- →Watch where the option pool is created — it affects dilution.
- →Prefer 1x non-participating liquidation preferences.
- →Engage a lawyer for any real term sheet.
FAQ
is this legal advice
No. It is a plain-language educational explainer to help you understand what clauses mean and which variations matter. Always have a qualified startup lawyer review a real term sheet before you sign anything.
why do these clauses matter so much
Term sheet clauses set control and economics for years. A single term — like a participating liquidation preference or full-ratchet anti-dilution — can dramatically change what founders keep in an exit, so understanding them is real negotiating leverage.
which clause should i worry about most
It depends on the deal, but liquidation preference, anti-dilution, and board composition most often shift control and payouts toward investors. Understand how each behaves in both a good exit and a bad one.
Is this legal or financial advice?
No — it explains common term sheet clauses in plain language for learning, not legal advice for your specific deal. Term sheets carry serious, binding implications, so before you sign anything, have an experienced startup lawyer review it. Use these explanations to understand what a clause like a liquidation preference means before that conversation, never as a substitute for it.
Which term sheet clause should founders worry about most?
Economics and control clauses tend to matter most — liquidation preferences (who gets paid first and how much), option pools, anti-dilution, board composition, and protective provisions can quietly shift ownership and decision-making. The generator explains these so you know what to scrutinise; a good lawyer then helps you negotiate the specific terms for your situation.
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