You've built something real, gained traction, and now an investor is ready to write a cheque.
You feel the pressure — and the excitement. Then, the term sheet arrives. You scan it for the significant number: the valuation. Maybe you even breathe a little easier when it's higher than expected.
But here's the trap:
It's not just about how much your company is worth — it's about what you get when the money flows back.
Valuation is just one lever in the broader economics of a deal. To understand whether the term sheet is founder-friendly, you must go deeper — into liquidation preferences, participation rights, and investor protections.
Because of that high valuation? It doesn't mean much if the structure is stacked against you.
Share this post