Term Sheets & Valuations: A Line by Line Look at the Intricacies of Term Sheets & Valutions (Bigwig Briefs)

Given the inexorability of math, therefore, there is only one other way to hit the 30x target: invest at a lower valuation. So if the initial valuation we agree upon with the company is, say, $1.5 million, our 30x target means that the company will need to be acquired eventually at a terminal valuation of $45 million. And guess what? It turns out t

The right of first refusal is not a big deal, and in some cases it’s good for you. But make sure you define what a major investor is and give this only to them. At a minimum, you can make sure that shareholders get this right only if they play in subsequent rounds.

As an entrepreneur, you should also ask that the no-shop clause expire immediately if the VC terminates the process. Also, consider asking for a carve-out for acquisitions. Frequently financings and acquisitions follow each other around. Even if you’re not looking to be acquired, you don’t want handcuffs on conversations about an acquisition just b

This is where secondary sales come in. What a VC firm will do is offer to buy some of the founder’s shares to provide the “idiot insurance” we talked about before. This is a delicate balance, and it usually results in a founder being able to sell 10 to 20 percent of their position, which in this case would be $3.5 million to $7 million, which after