Venture Capital Term Sheets

November.19.2019

Orrick Managing Associate Samir Bakhru sits down with partner Pete Fusco to discuss everything you need to know about venture capital term sheets, including the economics, control rights and pitfalls to avoid.

Part I: The Economics

It’s important for founders to determine what they need to hit the next milestone. Samir and Pete break down the economics of term sheets and all the factors that need to be considered when calculating a startup’s valuation.

Part II: Control Rights

Founders need to be cognizant of the control rights in investment documents at the early stages of their companies. Samir and Pete explain why board composition, preferred director rights and protective stock provisions are key to determining control rights.

Part III: Pitfalls to Avoid

There are many precautions founders can take to avoid pitfalls in the early stages of a startup, including invention assignment agreements and proper classification of employees. Samir and Pete outline crucial steps to take that will pay off in the long run.