Purpose. This section covers the instruments that move money into startups and the contract terms that decide who gets paid, who decides, and who is protected when things go badly. It covers SAFEs (pre-money and post-money), convertible notes, convertible preferred stock, liquidation preferences, anti-dilution, protective provisions and the rest of the NVCA-style term sheet. It is written for founders negotiating a round, associates drafting term sheets, and partners deciding which terms are worth fighting over.
What the study covers
- 1Overview: price is only one of the terms
- 2The instruments
- 3Economic terms in detail
- 4Control terms
- 5Key numbers
- 6Landmark cases and deals
- 7Pitfalls
- 8How an expert thinks about it
Technical exhibits
Worked examples, checklists and case studies included with this study.
Annotated Term Sheet
A Series A term sheet in NVCA style, annotated clause by clause with the market position, what founders push for, and what investors push for
Conversion and Waterfall Worked Examples
Python-computed examples that all reconcile: post-money vs pre-money SAFE conversion, a convertible note with cap and discount, liquidation waterfalls (non-participating, participating, capped, senior vs pari passu), and anti-dilution (broad-based, narrow-based, full ratchet)