Term Sheet Analyzer
Startup & Fundraising
Quick Answer
Enter your term sheet key provisions. Paste into Claude or ChatGPT. Get a plain-English analysis of each term, red flag identification, and negotiation recommendations.
What You Get
A term sheet analysis covering plain-English explanation of each key provision, founder-friendly versus investor-friendly assessment, economic impact calculation at different exit scenarios, red flags and negotiation recommendations, and an overall fairness assessment.
Who Is This For
Founders evaluating their first or subsequent term sheets, startup lawyers explaining term sheet mechanics to clients, and angels or VCs comparing term sheet terms across deals.
About This Template
A term sheet contains dozens of provisions that significantly affect founder economics, control, and future fundraising flexibility. Most founders receive their first term sheet without fully understanding liquidation preferences, anti-dilution provisions, protective provisions, and information rights. This template guides founders through entering their term sheet provisions, then uses AI to produce a plain-English analysis of each clause, identify which terms are standard versus aggressive, and calculate the economic impact of key provisions on founder returns at exit.
Fill In Your Details
Your company name
e.g. $5M
e.g. $20M
e.g. 1x non-participating, 1x participating, 2x non-participating
e.g. broad-based weighted average, narrow-based weighted average, full ratchet
e.g. 2 founders, 1 investor, 1 independent
List the major investor veto rights included in the term sheet
e.g. investor has right to maintain percentage in future rounds
Drag-along rights, information rights, ROFR, any unusual terms
Gather these details then use them to fill in the prompt below.
AI Prompts
Generate term sheet analysis
Paste this prompt into Claude or ChatGPT with your term sheet provisions filled in.
You are a startup lawyer analyzing a venture capital term sheet for a founder. Using the provisions below, produce a comprehensive plain-English analysis. Company: [company_name] Investment: [investment_amount] at [pre_money_valuation] pre-money Liquidation preference: [liquidation_preference] Anti-dilution: [anti_dilution] Board: [board_composition] Protective provisions: [protective_provisions] Pro-rata: [pro_rata_rights] Other provisions: [other_provisions] Produce: 1. Term Sheet Summary — overview of the deal in plain English 2. Liquidation Preference Analysis — how the preference works at different exit valuations with examples 3. Anti-Dilution Assessment — what this provision means and when it would be triggered 4. Board Control Analysis — who controls the board and what decisions require investor approval 5. Protective Provisions Assessment — which provisions are standard versus aggressive 6. Economic Impact at Exit — calculate founder proceeds at $25M, $50M, and $100M exit 7. Red Flags — any provisions that are unusually aggressive or non-standard 8. Negotiation Recommendations — which terms to push back on and what to ask for instead Note: this analysis is for educational purposes. The founder should review the final term sheet with their own counsel.
Sample Output
This is an example of what AI produces when you use this template.
Liquidation Preference Analysis
The 1x non-participating liquidation preference means: at exit, investors receive $5M first (their investment back). After that, all remaining proceeds are split among all shareholders including the investors on a pro-rata basis. This is the most founder-friendly liquidation preference structure — investors only get their money back first, then participate alongside founders in the upside. At a $25M exit: investors receive $5M first, remaining $20M split by ownership — investors get $5M plus $4M (20% of $20M) equals $9M total, founders get $16M combined. Compare to 1x participating: investors would get $5M plus 20% of all $25M equals $10M, leaving founders $15M.
Negotiation Recommendations
Push back on: 1. The drag-along threshold — requiring only 50 percent to force a sale is low. Request 60-70 percent or require founder consent for any drag-along below $50M exit. 2. The information rights clause requiring monthly financials — standard is quarterly. Monthly reporting is burdensome for an early-stage company. Accept quarterly with annual audited statements. Do not push back on: 1x non-participating preference — this is market standard and founder-friendly. Board composition of 2-1-1 — balanced and normal for Series A.