Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.

Terms sheets can be founder-friendly or investor-friendly. The terms sheet provides terms in favor of the founder over the investor or vice versa. 

Here’s how you can tell which one you have.

In a founder-friendly terms sheet:

– There is no expiration date on the investment offer

– The option pool comes out of both the investor’s portion, as well as the founder’s portion.

– There is no confidentiality agreement. The founders are free to talk about the deal.

– There is no liquidation preference for the investors.

– The startup does not pay investors legal fees.

In an investor-friendly terms sheet, these terms go the other way.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.
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Disclaimer:
Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.