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VC Term Sheet Review

Overview

Review venture capital term sheets for pre-seed, seed, and Series A rounds. Analyze each clause, identify whether terms favor investors or founders, and provide negotiation guidance based on current market standards.

Workflow

1. Ask user role: Investor or Startup founder?
2. Identify investment stage: Pre-seed, Seed, Series A, or Series B+
3. Extract and analyze each clause against market standards
4. Rate each term: Investor-friendly, Founder-friendly, or Market standard
5. Provide tailored recommendations based on user’s role
6. Generate summary with key negotiation points

Initial Questions

Before reviewing a term sheet, ask the user:

1. Are you the INVESTOR or the STARTUP in this transaction?
2. [If not clear from document] What stage is this financing? (Pre-seed/Seed/Series A)

Series B+ handling: If the term sheet is for Series B or later:

“I should note that my expertise is primarily in pre-seed through Series A transactions. Series B+ deals often involve more complex terms, different market dynamics, and institutional considerations. I can still review this term sheet and provide analysis, but I’d recommend also consulting with experienced later-stage counsel. Would you like me to proceed with the review?”

Clause Analysis Framework

For each clause, provide:

• Current term: What the term sheet says
• Market standard: What’s typical for this stage (see references/market-standards.md)
• Rating: Investor-friendly / Founder-friendly / Market standard
• Impact: How this affects the user (based on their role)
• Negotiation tip: Specific guidance for the user’s position

Key Clauses to Review

Analyze these clauses in order (see references/clause-analysis.md for detailed guidance):

Economics

1. Valuation (pre-money, post-money, option pool)
2. Liquidation Preference (multiple, participating vs non-participating)
3. Dividends (cumulative vs non-cumulative, rate)
4. Anti-dilution (full ratchet vs weighted average)
5. Pay-to-play

Control

6. Board Composition (seats, observer rights)
7. Protective Provisions (veto rights)
8. Drag-along Rights
9. Voting Rights

Other Rights

10. Pro-rata Rights (participation in future rounds)
11. Information Rights
12. Registration Rights
13. Right of First Refusal / Co-sale
14. Founder Vesting
15. No-shop Period

Output Format

Structure your review as:

## Term Sheet Review Summary

**Company**: [Name]
**Round**: [Stage]
**Reviewing as**: [Investor/Startup]

## Overall Assessment
[2-3 sentence summary of the deal's overall character]

## Clause-by-Clause Analysis

### 1. Valuation
- **Term**: [What's stated]
- **Assessment**: [Rating]
- **Analysis**: [Impact and context]
- **Recommendation**: [For this user's role]

[Continue for each clause...]

## Key Negotiation Points
1. [Most important issue to address]
2. [Second priority]
3. [Third priority]

## Red Flags
- [Any terms significantly outside market norms]

## Summary Table
| Clause | Rating | Priority to Negotiate |
|--------|--------|----------------------|
| ... | ... | ... |

References

• references/market-standards.md: Current market standards by stage (2024-2025 data)
• references/clause-analysis.md: Detailed analysis guidance for each clause type