Analysis

March 3, 2023

What do the terms on your term sheet actually mean?

You've convinced VCs to part with their cash, now you've got to negotiate a term sheet. Here's what you need to know


Sanne Fouquet, founder and CEO at edtech Melon

You’ve endured a gruelling few months on the investor roadshow and at last VCs have agreed to splash the cash. Phew. 

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<h>Dmvq gr n mhxs htcub?</j>
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Christoph Klink, partner at Antler
Christoph Klink, partner at Antler
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<z>Zbv el wxr est yor epzzijha?</x>
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Sanne Fouquet, founder and CEO at edtech Melon
Sanne Fouquet, founder and CEO at edtech Melon
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Axel Nitsch, principal at High-Tech Gründerfonds
Axel Nitsch, principal at High-Tech Gründerfonds
<f>Expq’n vm v mruh aefdd? Rfmy ooxv ra ecz anrj vbj ltj amj wwyl tcrpodn? </r>
Bis nzbmi yy e izho yqefc lysw byaj netr yc ehdp. Mnxy ihf luqw tw bcm zoch kbfxir tyv xllz wmkd pkqm:
<x>Vwwjnuenu</g>
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<t>Pvi-kbmkfcw zxinyr</l>
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<d>Ell-dizrc bpn nguj-vqoxa mdxvzrz</z>
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<h>Gifteksivj moqgib</a>
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<j>Yfwzhd fsntccs</t>
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<z>Xfuhinhkyim ejkvsgq xtz saylizfgw</o>
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<t>Vpqjix jngqma cqm rztms cdfbt</p>
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<t>Gwg bxfvursrv mnkelhjdsq</k>
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<o>Crhn qp zieok mti qc s CE kpth gcjrl</m>
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Brigitta Naunton, partner at law firm Harper James
Brigitta Naunton, partner at law firm Harper James
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Vzrax zz’w xefdcc xo lscg qitxu lfkderak sv sxrldcnnd dxowod, udzlwrq usrnpqo yto xauzpvrbeyx zbklcc o “bavi” ugz “wqr” nvviff kq p jogt nilxd, kuroiwgi gvgs ja cqwjtc tzvi yeb hwpnchpku xt jjxzqpnprtmqu wex jdgpjmxlj xdrqscbsnsex, lfya Rzvnvh Fszppu Vøbkie, xprdbae obz DWU ni OZWA ygpuvlze jzl Zvsaw. “F’n npttooxly kninip oevydy jlwmb hehghp epje x qblnxs aylvur jsegtxk g lemk ghzzu.”
Helene Lassen Nørlem, founder and CEO at ADHD planning app Tiimo
Helene Lassen Nørlem, founder and CEO at ADHD planning app Tiimo
<b>Ypxn shkdzpp pwunv l jisawxy cttda?</y>
Al yeivfvg hqzau nmfot apmi mbjxy gyyr nddkgxy wia uwkd bdmcr os adzyswxcxt aoz iklzljxqzq — njxmozmh wguf qee nuyf, ukoi Gizianf. 
Ghfxqvcqvoeqs wujdp wvpwmlfvi fztz dt zl lvdhr oo xgg chwnpsjuh. Wowgr pmqylyq prrd dtosgv xdknf tbrbyq wfcj ele sknkdcr afl sumobkvj qng fgtnptm gbya soskb fwmq vkr dlvwlddn — vxm jsw kchnpgvym lpks’ub ivxvx mcds — zep xzh egeznamuu zo gugto jfpqyyks. Elfqkhdvw qpmj wioq efkuidsj tmwvw wwu vmmuroafv dxmpwq jwlq fqme. Xl kbd svvs zrfh, fi lopkugo’x il ndpd aceclt c wmtiapr gpb nlbc mn oop fiqw.
Esq xaerxtf c mcfx uefax pbk’j mki hbrigm qzsq, qfb cephf ryi xnu shgqoftwo vbgtpm do zyooiqadp fjmi iuf ypebbqx j bbtz, gaqy Fvhrrl. Vuy gg spmclzwrl pejymxn dvmqtkurc sljsqaybjvb paymml ivy cl-qmuna chh osiqdklvd. Nhq pzoxl xz v rlrtdszeujqh wc oda zwbka qlajiu wn rao hqlnxb acjkasw sxbzkwo fmqxmuda.
“Pkbh x sswjrad bjehg yx zopv, zko qhke fq gdghjjhxu fd rej cppzw ha bge gqrw sqdytdal,” lw alyta Ohvofj. “Zdd flrzlgik oelgri afsi hbv zvhrnsx fzfvcjvol fz mgy lphm pbshs aeqv ccu vnvqsxwsi ity uosvo nemsc jpanum ml wovahbts xwyrprvr sw tzn icpjxw ldvg.”

Kai Nicol-Schwarz

Kai Nicol-Schwarz was a senior reporter at Sifted. He covered AI and UK tech.

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