Inc.

THE DOS AND DON’TS OF TERM SHEETS

Congratulations! Your business has charmed an investor. Now you’ll need to wade through the term sheet, an outline that lays out the finer points of your funding. The valuation of your company is right there, as is the amount of the investment. But there’s a lot of other legalese, too. Add time pressure to the mix, and a lot can go wrong. Before you sign that term sheet, read these few pointers from the pros.

DO

Woo Multiple Investors Simultaneously

Investors often come to the negotiating table with more power than founders have—but there’s a way you can increase your leverage. Pitch your company to several firms and try to simultaneously line up more than one offer, says Noam Wasserman, an entrepreneurship professor at the University of Southern California’s Marshall School of Business (and a member of

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