Term Sheet Clinic Episode 1

In this episode of Term Sheet Clinic, Anthony Rose from SeedLegals explains how founders should read and negotiate an investor term sheet. Because real term sheets are confidential, SeedLegals created a realistic sample term sheet from a fictional investor, Helpful Ventures, investing £500,000 into a typical seed round. Anthony walks through the key clauses founders need to understand before signing, including valuation, share class, liquidation preferences, option pools, investor consent, founder vesting, drag-along and tag-along rights, leaver provisions, warranties, exclusivity, legal fees and more. The episode explains what’s standard, what’s negotiable, and which terms could create problems for founders later. It’s especially useful if you’re raising a seed round, preparing to negotiate with investors, or trying to understand the difference between angel-friendly terms and VC-style terms. Read the SeedLegals Term Sheet Clinic guide: https://seedlegals.com/resources/seed... Chapters: 00:00 Introduction to Term Sheet Clinic 00:35 Why term sheets are usually confidential 01:10 Creating a sample term sheet from Helpful Ventures 01:55 How UK founders use SeedLegals for term sheets 02:45 Investment amount and valuation 03:25 Pre-money vs post-money valuation 04:10 Total raise size and investor commitment 04:55 Share classes: ordinary shares vs preference shares 06:00 Liquidation preferences explained 07:15 Participating vs non-participating preference shares 08:05 1x vs 2x liquidation preference 08:45 Option pools and founder dilution 10:05 Investor directors and board control 11:50 Investor majority and consent rights 13:05 Which decisions should need investor consent 14:40 Founder vesting explained 15:55 Three-year vesting vs four-year vesting with a cliff 17:25 Drag-along rights 18:50 Tag-along and co-sale rights 20:05 Pre-emption rights and future funding rounds 21:25 Information rights and investor updates 22:35 Founder salaries 23:40 Leaver provisions: good leaver, bad leaver and forced leaver 25:35 Fair value and founder share buybacks 26:35 Share transfer restrictions 27:35 Warranties and founder liability 29:05 Dividend policy 29:25 Arrangement fees 30:20 Exclusivity and no-shop periods 31:45 Key person insurance and D&O insurance 32:40 Investor legal fees 33:35 Signing deadlines and negotiation pressure 34:30 Final advice: everything is negotiable #TermSheet #SeedLegals #StartupFunding #Fundraising #FounderTips #StartupAdvice #AngelInvestment #VentureCapital #SeedRound #SEIS #EIS #InvestmentTerms #StartupLaw #UKStartups #CapTable #PreMoneyValuation #PostMoneyValuation #LiquidationPreference #FounderVesting #InvestorConsent #OptionPool #FounderEquity