The Definitive Guide to VC Term Sheets

7 Days

·

Cohort-based Course

Master VC term sheets with The Academy – the go-to school for those perfecting the craft of venture capital.

Instructor Experience

company logo
B Capital
Comcast Ventures
Bloomberg Beta

Course overview

Mastering VC Term Sheets: A Course for Aspiring and Seasoned Investors

***UPDATE: To keep the quality of conversation and interaction high, I'm limiting each cohort to 5-10 students. Once a cohort reaches capacity, I'll open a new one for you to enroll in.


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In the venture capital world, term sheets are more than just documents—they are the foundation of your investment strategy and returns. Whether you’re a new VC looking to sharpen your skills or a seasoned investor aiming to stay ahead, this course will provide the insights and tools to navigate term sheets confidently and precisely.


Designed specifically for current and aspiring venture capitalists, this course offers a deep dive into the key elements that drive successful investments. You'll learn to decode term sheets and understand critical terms like valuation, liquidation preferences, anti-dilution provisions, and more—all through the lens of maximizing investor value. We’ll cover the nuances that can make or break a deal, from structuring terms to mitigate risks to leveraging your negotiation position to secure favorable outcomes.


By the end of this course, you will:

- Master the essential components of a venture capital term sheet and understand how each term impacts your investment’s potential.

- Develop advanced negotiation tactics to protect your interests while aligning with founders for mutual success.

- Anticipate and address potential pitfalls, enhancing your ability to structure deals that drive returns.


This course is tailored for investors looking to deepen their understanding of term sheets and refine their deal-making prowess. Whether managing your first deal or expanding your portfolio, you’ll be equipped with actionable strategies, expert insights, and the confidence to craft winning term sheets.


Elevate your venture capital skills—understand, negotiate, and invest with excellence.

Who this course is for

01

VCs investing in startups who need to negotiate term sheets and want to ensure their investments are aligned with their return targets.

02

Aspiring VCs who want to break into the industry, crush their interviews, and land their first job at a VC firm.

03

Founders raising (and preparing to raise) venture capital who will need to negotiate term sheets and want to protect their interests.

What you'll learn in this course

The key concepts: economics and control

Economics in VC term sheets defines financial terms like valuation, liquidation preferences, and anti-dilution, determining payout and ownership. Control covers decision-making rights, board composition, and voting power. Balancing both ensures fair, strategic partnership.

Pre-money vs. post-money valuation

Pre-money valuation is the value of a startup before new investment, while post-money valuation is the value after investment, including the new capital. The difference impacts ownership percentages and how much equity an investor receives for their investment.

Fully diluted post-money capitalization

The fully diluted post-money capitalization includes all outstanding shares plus options and convertible securities. It affects valuation by reflecting the total potential dilution and giving a clearer picture of ownership stakes after new investment.

The option pool shuffle

The option pool shuffle refers to allocating a portion of shares for future hires, usually from the founder’s equity before calculating the investor’s ownership. This can dilute the founder’s stake, so understanding its size and timing is key to fair negotiation.

SAFEs, convertible notes, and warrants

Outstanding SAFEs, convertible notes, and warrants can impact valuation by adding potential future shares to the total equity. They dilute current ownership and decrease the effective valuation.

The three types of preferred stock

Preferred stock types include non-participating (gets its payout or its share of the proceeds), participating (gets its payout plus a share of remaining proceeds), and participating with a cap (gets its payout plus a share of remaining proceeds up to a certain amount).

How liquidation preference works

Liquidation preference determines the order and amount investors are paid in an exit event. It ensures preferred shareholders are paid first, up to a specified amount, before common shareholders see any returns. This can protect investor interests but may impact founder proceeds.

Voting rights

Voting rights are crucial for founders as they determine who has a say in key business decisions, such as fundraising, strategic changes, and exits. Ensuring balanced voting rights helps maintain founder control and aligns decision-making with the company's vision and goals.

Protective provisions

Protective provisions give VCs the right to veto significant decisions, such as company sales or new share issuance. Understanding these provisions helps investors safeguard their interests while ensuring alignment with the founders' long-term vision.

Anti-dilution protection

Anti-dilution provisions shield VCs from losing value in down rounds by adjusting their equity. Understanding these terms helps investors protect their stake while fostering a fair equity distribution, maintaining alignment with founders across all funding stages.

Pay-to-play

Pay-to-play provisions require VCs to invest in future rounds to maintain their rights and avoid dilution. Understanding these terms helps investors protect their position while aligning commitment levels and ensuring ongoing support for the portfolio company's growth.

Redemption rights

Redemption rights let VCs require a company to repurchase shares after a set period. Understanding these rights helps investors manage exit timelines and liquidity, while balancing the need for the company's financial stability and growth potential.

Registration rights

Registration rights allow VCs to require a company to register their shares for public sale. Understanding these rights helps investors plan exit strategies while considering the company’s readiness and the potential impact on its market debut.

Information rights

Information rights give VCs access to company financials and updates. Understanding these rights helps investors ensure transparency and trust while respecting the company’s need to safeguard sensitive information and maintain operational integrity.

Pro rata rights

Pro rata rights enable VCs to maintain their ownership stake in future rounds. Understanding these rights helps investors protect their equity position while supporting the company's growth and ensuring a balanced ownership distribution over time.

Vesting schedules

Vesting schedules define how founders and employees earn their equity over time. For VCs, understanding these schedules is key to ensuring aligned incentives, retaining key talent, and protecting the company from premature equity loss due to early departures.

Rights of first refusal (ROFR)/co-sale rights

Rights of first refusal (ROFR) and co-sale rights let VCs buy shares before they’re sold to outsiders. For investors, understanding these rights is essential to manage equity sales, control cap table dynamics, and prevent unwanted dilution while maintaining strategic influence.

Board structures: founder-controlled, investor-controlled, and balanced

Founder-controlled boards preserve the founder’s vision, investor-controlled boards focus on investor interests, and balanced boards offer a middle ground. Understanding these dynamics ensures effective governance and alignment of incentives.

Drag along rights

Drag-along rights enable majority shareholders to compel minority shareholders to join in a company sale. Understanding these rights helps VCs ensure smooth exits by preventing minority holdouts from blocking deals and securing full stakeholder support.

This course includes

4 interactive live sessions

Lifetime access to course materials

In-depth lessons

Direct access to instructor

Projects to apply learnings

Guided feedback & reflection

Private community of peers

Course certificate upon completion

Maven Satisfaction Guarantee

This course is backed by Maven’s guarantee. You can receive a full refund within 14 days after the course ends, provided you meet the completion criteria in our refund policy.

Course syllabus

Week 1

Oct 21—Oct 27

    Oct

    22

    Monday Workshop: Meet and Greet (optional)

    Tue 10/2212:00 AM—12:30 AM (UTC)
    Optional

    Offering Terms: the Valuation Shuffle

    8 items

    Oct

    23

    Workshop 1: cap tables

    Wed 10/2312:30 AM—2:00 AM (UTC)

    Certificate of Incorporation (COI) aka charter

    10 items

    Oct

    25

    Workshop 2: liquidation preference

    Fri 10/2512:30 AM—2:00 AM (UTC)

    Stock Purchase Agreement (SPA)

    3 items

    Oct

    27

    Workshop 3: anti-dilution

    Sun 10/275:00 PM—6:30 PM (UTC)

    Investors' Rights Agreement (IRA)

    12 items

    Right of First Refusal & Co-Sale Agreement

    1 item

    Voting Agreement

    2 items

    Other Matters

    4 items

    Capstone Project: Comparative Analysis of Term Sheets

    1 item

Post-course

What people are saying

        Morgan was instrumental in helping me understand the term sheets I received. He flagged which areas were off-market, and helped me think through how to negotiate the terms that mattered to me.
Abhishek Chopra

Abhishek Chopra

Founder & CEO of BosonQ Psi
        Morgan has helped me understand how VCs think. I've spent numerous late nights discussing strategy with Morgan, and he's always willing to go the extra mile.
Ged Ossman

Ged Ossman

Founder & CEO of Interf

Meet your instructor

Morgan Polotan

Morgan Polotan

🚀 Over 10 years as a VC across Monashee, B Capital, Comcast Ventures, and Bloomberg Beta, I've deployed over $50 million into 20+ startups.


🤓 I've reviewed, written, and negotiated more term sheets than I can remember.


The purpose of this course is to share what I've learned about VC term sheets with you.


🚀 If you're a current or aspiring VC wanting to master your craft, or a founder raising venture capital, this course is for you.


🤳 Find me on Intro, LinkedIn, and X.

A pattern of wavy dots

Join an upcoming cohort

The Definitive Guide to VC Term Sheets

Cohort 3

$499

Dates

Oct 21—28, 2024

Application Deadline

Oct 19, 2024

Each lesson in this course maps to a section of the NVCA model term sheet

~5 hours per week

  • 🎥 Pre-recorded videos

    3.5 hours per week

    Each lesson contains a pre-recorded video to introduce each section of the National Venture Capital Association (NVCA) model term sheet.

  • 📅 Live sessions

    1.5 hours per week (EST)

    Every Sunday at 1p EST your instructor will lead a live 90-min full cohort workshop with plenty of hands-on exercises to help you clarify concepts you don't fully understand and ask questions specific to your situation.

Free resource

Free Webinar: Learn the Y Combinator SAFE

Are you curious about what this course will be like?


Sign up for a free webinar on Y Combinator's Simple Agreement for Future Equity (SAFE).


According to Carta, 89% of pre-seed and 50% of seed rounds in Q4-23 utilized SAFEs.


While the SAFE is famous for its speed and simplicity, it also presents unexpected complexities. There are three variants:


  1. Valuation Cap, No Discount
  2. Discount, No Valuation Cap
  3. Most Favored Nation (MFN), No Valuation Cap, No Discount


When negotiating a preferred equity term sheet, it's critical to understand how the SAFE works.

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Term sheets are better with cohorts

Term sheets are better with cohorts

Hands-on learning

Don't just passively read books. Learn term sheets from the ground up and actively apply your knowledge so you never forget.


This course uses a combination of pre-recorded video, hands-on exercises, and live instruction to build your knowledge of term sheets from the ground up.

Access to an expert

Direct access to a VC firm partner with 10 years of experience deploying $50m+ into 20+ startups.


The fastest way to learn is by asking direct questions relevant to your situation. You'll have an unlimited ability to ask me questions via email, chat, and text.

Peer community

We have founders, VCs, startup executives, angel investors, family offices, attorneys, and MBA students attend our workshops.


I keep each cohort limited to 5 people to ensure each live session is high quality and interactive.

Frequently Asked Questions

How do I get reimbursed for this course by my company/firm?

Is the course live or pre-recorded?

I work full-time. What is the expected time commitment?

Are there any prerequisites for this course?

Will I have another opportunity to take this course?

What happens if I can’t make a live session?

How can I continue my term sheet learning journey after the course?

I already understand term sheet basics. Will this course help me improve further?

I am not a VC or a founder, but I work closely with them as an angel/startup executive/LP/attorney. Is this course for me?

I want to break into VC. Is this course for me?

How much access to the instructor do I get?

What’s the refund policy?

A pattern of wavy dots

Join an upcoming cohort

The Definitive Guide to VC Term Sheets

Cohort 3

$499

Dates

Oct 21—28, 2024

Application Deadline

Oct 19, 2024

$499

7 Days