Term Sheet Analyzer
Understand and compare term sheet terms
Liquidation Preference
Option Pool
Anti-Dilution
Exit Scenario Analysis
Term Rating
Key Terms Glossary
Investors get paid first in an exit. 1x means they get their investment back before common shareholders.
Non-participating: investors choose preference OR pro-rata. Participating: they get both ("double dip").
Protects investors if you raise at a lower valuation. Broad-based weighted average is standard and fair.
What is Term Sheet Decoder?
A term sheet decoder helps founders understand the key clauses in a venture capital term sheet, including valuation, liquidation preferences, anti-dilution provisions, board composition, protective provisions, drag-along rights, and other governance terms. It explains what each clause means and identifies founder-friendly versus investor-friendly terms.
How to use this calculator
- 1Paste or manually enter the key terms from your term sheet into the relevant fields.
- 2Review the plain-English explanation of each clause and the founder-friendliness rating.
- 3Compare your terms against the industry-standard benchmarks highlighted in red or green.
- 4Identify the 2–3 clauses that most deviate from founder-friendly norms and prioritize those for negotiation.
- 5Use the output as preparation material for your investor negotiation or legal counsel briefing.
Why this matters for founders
A term sheet is the most consequential legal document most founders will ever sign. Unfavorable terms can cost founders millions at exit or give investors control over key decisions. Understanding each clause prevents founders from unknowingly accepting punitive terms.
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