Revisiting the Term Sheet

In 2005, my partner Jason Mendelson and I wrote a long series of posts describing all of the parts of a typical venture capital Term Sheet.  We started on 1/3/05 with a post on Price and finished up on 8/23/05 with a post on Indemnification and Assignment

Of all of the stuff I’ve written over the past four years, my stats continue to tell me that stuff we wrote in the Term Sheet series is some of the most popular content on my blog.  As I was writing my post I Blog, I Tweet, But Why I realized that many of you have started reading my blog after 1/1/06 so you might have missed this series.

We’ve seen this series used as the base for a number of college courses, we’ve been thanked by people all over the world for writing it, and we’ve been encouraged to publish a version of it in book form.  Maybe someday we will get around to it, but for now it’s still relevant as an original web based life form.

For quick reference, following are the key posts:

While the 24 references are a bit dated (we might use Lost or Weeds this time around), I hope you will also enjoy (or at least forgive us for including) a little bit of Jack Bauer.

  • That is a really helpful series. Is there a way you would be willing to do a series about the materials you expect to see from the entrepreneur? A post on projections / cash flow analysis would be really helpful to me.

    • Great suggestion. On the list for future posts.

  • Art

    Any chance you could pull all the pieces together into a single document? I'd like to save and share it more easily.

    • Click on the link in the right sidebar below the Recent Readers map titled “Download My Content.” Choose the Category “Term Sheet” and whatever other options you want. That should do it.

  • Alexander Muse

    Thanks for posting these again, these are some of the best resources on the topic anywhere.

  • Hi Brad, I thought you should look very serious and business-like. And i am happy to see actually you don't… haha… / Kehong from China

  • Yuri Ammosov

    I try to follow VESTING link in the series list above. Instead, LIJIT.COM replies that "nothing is found". Your blog page is seen but the CONTENT container is empty. Sorry for not being able to pinpoint the issue further.

    • Yup – I’m seeing that problem on http://www.feld.com/archives/2005/05/term_shee… Looks like I’ve got a page mapping problem on some of the archive pages. Thanks for finding this.I’ll try to hunt it down and fix it.

      • Yuri Ammosov

        Brad: tnx. Great to have them restored. You know, I am a professor of entrepreneurship at Moscow's Fiztech (aka Russia's MIT), and I keep using your series as one of teaching materials ever since they were first published. Even though they are totally irrelevant, as none of my students stands a chance to be venture funded, they are still great to see into the funding process and goals.

        • Wow – very cool! Glad to be helpful.

          • Yuri Ammosov

            Brad: your texts are simply good stuff so thank you. The Term Sheets manual is more thorough of course but students simply cannot get it – its way over their heads. So we need something popular and plain.

            How soon do you think the VC funds will be back to look at round 1 deals for first time entrepreneurs? 1 year, 2 years, 5 years, never again?

          • We are actively doing first round investments right now – most of our new investments (which you can see on http://www.foundrygroup.com) are first rounds. A number of the early stage firms (e.g. Union Square Ventures, First Round Capital, Spark Capital, True Ventures) are very active right now. The notion that early stage investing isn’t happening is a misperception.

          • Yuri Ammosov

            And do you also imply first-time entrepreneurs in their 20s?

          • Yup – we’ll invest in first time entrepreneurs who are in their 20’s. Fred Wilson at Union Square Ventures has a number of these types of investments also, including Etsy and Tumblr, and has written pretty extensively on his philosophy about entrepreneurs and age on his blog at http://www.avc.com.

  • Yuri Ammosov

    *sign* Good to have so much risk-conscious capital. In Russia, it's FFF or nothing until your company gets a positive cash flow.

  • Yuri Ammosov

    Brad: the links look broken. Is the series relocated anywhere?

    • They seem to be working for me. Can you tell me more about the problem you are having.

  • Yuri Ammosov

    I try to follow VESTING link in the series list above. Instead, LIJIT.COM replies that “nothing is found”. Your blog page is seen but the CONTENT container is empty. Sorry for not being able to pinpoint the issue further.

    • Yup – I’m seeing that problem on http://www.feld.com/archives/2005/05/term_shee… Looks like I’ve got a page mapping problem on some of the archive pages. Thanks for finding this.

      I’ll try to hunt it down and fix it.

      • Yuri Ammosov

        Brad: tnx. Great to have them restored. You know, I am a professor of entrepreneurship at Moscow's Fiztech (aka Russia's MIT), and I keep using your series as one of teaching materials ever since they were first published. Even though they are totally irrelevant, as none of my students stands a chance to be venture funded, they are still great to see into the funding process and goals.

        • Wow – very cool! Glad to be helpful.

          • Yuri Ammosov

            Brad: your texts are simply good stuff so thank you. The Term Sheets manual is more thorough of course but students simply cannot get it – its way over their heads. So we need something popular and plain.

            How soon do you think the VC funds will be back to look at round 1 deals for first time entrepreneurs? 1 year, 2 years, 5 years, never again?

          • We are actively doing first round investments right now – most of our new investments (which you can see on http://www.foundrygroup.com) are first rounds. A number of the early stage firms (e.g. Union Square Ventures, First Round Capital, Spark Capital, True Ventures) are very active right now. The notion that early stage investing isn’t happening is a misperception.

          • Yuri Ammosov

            And do you also imply first-time entrepreneurs in their 20s?

          • Yup – we’ll invest in first time entrepreneurs who are in their 20’s. Fred Wilson at Union Square Ventures has a number of these types of investments also, including Etsy and Tumblr, and has written pretty extensively on his philosophy about entrepreneurs and age on his blog at
            http://www.avc.com.
            />

          • Yuri Ammosov

            *sign* Good to have so much risk-conscious capital. In Russia, it's FFF or nothing until your company gets a positive cash flow.

  • Great suggestion. On the list for future posts.

  • Click on the link in the right sidebar below the Recent Readers map titled “Download My Content.” Choose the Category “Term Sheet” and whatever other options you want. That should do it.

  • Thanks for posting these again, these are some of the best resources on the topic anywhere.

  • Kehong Woo

    Hi Brad, I thought you should look very serious and business-like. And i am happy to see actually you don't… haha… / Kehong from China

  • Art

    Any chance you could pull all the pieces together into a single document? I'd like to save and share it more easily.

  • That is a really helpful series. Is there a way you would be willing to do a series about the materials you expect to see from the entrepreneur? A post on projections / cash flow analysis would be really helpful to me.