Term sheets may look simple, but they carry complex implications. This guide breaks them down for high-net-worth investors.
Breaking Down the Basics
Key Clauses to Watch
Look out for liquidation preferences, anti-dilution clauses, and board composition rights.
Common Red Flags
Excessively founder-friendly terms, missing exit strategy details, or unclear voting rights.
Real-World Example
A Singapore-based family office nearly lost voting power due to a poorly structured clause.
FAQ
Q1: Should I always use a lawyer?
A: Yes—especially for multi-million-dollar stakes.
Q2: Are there templates I can study?
A: Yes. Try NVCA.org for U.S.-style templates; Asia-focused templates vary by jurisdiction.
User Comments
InvestInPeace: “Wish I had read this before signing my first angel deal.”
SashaQ: “Can you do a version focused on crypto startups?”
Editor’s Note
The devil is in the details. Even seasoned investors sometimes overlook soft clauses—get advice.
Tags: #TermSheetGuide #AngelInvestor #HNWIInvesting #LegalBasics