Managing Director David Maughan provides term sheet tips in a VC-List article
David Maughan, managing director and supervisory principal with Navigant Capital Advisors, discusses venture capital (VC) funding and creating the term sheet. If an innovative idea is the engine of growth for a startup venture, then financing is the fuel that keeps the engine running. The term sheet defines the price of the financial “fuel,” how much of it will be provided by the venture capital (VC) firm, and the conditions attached.
Maughan states, "While there are many factors to consider in negotiating a financing package for a VC investment, it is clear that fueling a startup’s growth engine begins with creating the right roadmap— the term sheet — for the financial relationship."
Entrepreneurs need to reflect on what valuation they have created. Then armed with the knowledge of what they're worth, they must be prepared to defend it.
Maughan provides recommendations on negotiating a term sheet in a manner that will be equitable for both the startup and the investors.