Term Sheet Cheat Sheet
By Jan Ritter · 30 September 2026
By Jan Ritter · 30 September 2026
The 5 terms to fight for in your first term sheet
Even though a term sheet is only a few pages long, everything after it follows what it says. It is legally non-binding, but commercially, the deal usually doesn't get better after you sign it.
The Term Sheet Cheat Sheet explains every term in a seed term sheet in plain words, with the market standard to aim for and how hard to push.
Here are the five terms that shape your first round.
This clause sets who gets paid first when the company is sold. The standard is 1x non-participating, and it is the one term on this page not to give up. Any stronger liquidation preferences can leave founders with very little on a modest exit.
Anti-dilution kicks in when a later round is priced below this one. Broad-based weighted average is the market standard. A full ratchet at seed is a walk-away point.
The pool for future hires can be counted before or after the investment, and that choice moves percentage points between founders and investors. If it is counted post-money, both sides share the dilution.
After the round, the board and the investor's consent list steer the company. A founder-leaning board is normal at seed. So is a consent list that leaves the budget and hiring with you.
A drag-along can pull every shareholder into a sale, including founders who were against it. Tie it to a majority that includes the founders.
Valuation, founder vesting, and tag-along rights are usually fine, but read the detail. Run the post-money math on your own stake before you agree to a valuation. On vesting, read the bad-leaver terms closely, since they can reach shares a founder has already earned. The tag-along should work both ways.
Pro-rata rights, information rights, the right of first refusal, and the fine print on reps and warranties, expenses, and exclusivity are customary. You can sign them with confidence as long as your liability is capped.
Put your term sheet next to the Cheat Sheet and mark each term as fight, check, or accept. Write down your position on the top five before the first negotiation call. Push while you still have leverage, which means before exclusivity starts running.
This blog post is for discussion and general information purposes only and should not be considered legal advice.
Your first 30-minute founder session with us is free. Before you start pitching investors, we sit down with you and pressure-test your financing strategy against the terms above. In that half hour, we work out with you how much to raise, at what valuation, and with which instrument. Then we go through the clauses that will matter most in your deal, so you know the terms you want before you get the first term sheet.
We have supported more than 210 startups and investors and worked on over CHF 330M in venture deals, so we know where investors usually give ground. If we are a good fit, the same team negotiates the long-form documents with you and takes the round to closing.
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