Concept

Term sheet red flags

Term sheet red flags are deal terms that shift economics, control, or future optionality against the founder beyond what the headline valuation implies. Venture-backed founders should care this week if anything is in negotiation: preference stacks, board composition, protective provisions, and option-pool shuffle can matter more than a round number on the first page. Read for the second close — not the press release.

Where founders get this wrong

• Celebrating valuation while skimming preference, participation, and seniority language.
• Accepting an option-pool increase that dilutes founders pre-money without modeling it.
• Agreeing to broad protective provisions that turn every hire and pivot into a board event.