Term Sheet Explainer
Additional Tools
Term Sheet Explainer
Understand the key terms and clauses in investment term sheets.
Select a Term
Valuation (Pre-money/Post-money)
What it means:
Pre-money valuation is your company worth before investment. Post-money = Pre-money + Investment amount.
Example:
If pre-money is $8M and investor puts in $2M, post-money is $10M. Investor owns 20%.
⚠️ Watch out:
Always clarify if the valuation quoted is pre or post-money!
General Advice
✓ Always get a lawyer to review your term sheet
✓ Understand every single clause before signing
✓ Compare terms to market standards (use YC SAFE as baseline)
✓ Some terms matter way more than valuation
✓ If something feels unfair, it probably is - negotiate!