How to REALLY Negotiate a Term Sheet: Venture Hacks
I love the Internet. Really smart people with direct experience of issues offer free advice to anyone who cares to read their blog. A couple of experienced entrepreneurs recently started a blog called Venture Hacks. The first few posts are about the strategy surrounding board seats. Honestly, I hadn't given board composition any serious thought, so their posts were a wakeup call.
Whether you negotiate a proportional or investor-leaning board, your term sheet will probably state that the CEO of the company must fill one of the common board seats. This may seem reasonable. One of the founders is probably the CEO and you were going to elect him to the board anyway.
Don’t accept this term. The investors are looking several moves ahead of you.
