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Training Guide

Venture Capital Term Sheets


Training Guide

Venture Capital Term Sheets

Venture Financing
Remote or in person

What’s Covered

  • Main terms of venture capital term sheets
  • Offering terms
  • Economic rights
  • Control and governance rights
  • Vesting and employment
  • Other terms commonly found in venture capital term sheets

Before the Session

Prepare the Attendees

Send the attendees an invitation for the session. Include this link, which has the videos and exercise they’ll need to prepare.

Prepare Yourself

Watch the videos and read the exercise so you’re familiar with the Hotshot material.

  • still frame from Economic Rights


    Venture Capital Term Sheets

    A discussion of the perspective of companies and investors on the main economic and control rights negotiated in a venture financing term sheet. Includes liquidation preference, anti-dilution provisions, board rights and employment matters.

During the Session

Part 1: Knowledge Check

Ask attendees these questions to ensure they understand the topic:

  • What are some common offering terms?
  • How is price per share calculated?
  • How might valuation be expressed in a term sheet?
  • What are some typical economic rights given to investors?
  • What is a liquidation preference and is it better to be participating or non-participating from an investor’s point of view?
  • What are some common control rights given to investors?
  • What portions of a term sheet are usually binding on the parties?
  • Which documents are usually referenced in the term sheet?

Part 2: Group Exercise

Lead a group discussion based on the exercise. To encourage collaboration, divide the attendees into groups to discuss the exercise, then have a representative from each group summarize their views to the larger group. Call on people to share their thoughts and ask others to respond.

Tip for remote sessions: use your web conferencing system’s breakout room feature to divide people into groups.

Part 3: War Stories and Firm Specifics

Share your own experiences and guidance, including:

  • Anecdotes and war stories (e.g., about a near-disaster or a tough negotiation)
  • General practice tips (dos and don’ts)
  • Firm-specific guidance and practices

After the Session

To continue their learning, attendees can check out related courses in Hotshot’s Venture Financing topic.

About Hotshot

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