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Just Say No: VC terms that can really hurt - Venture Hacks

http://venturehacks.com/articles/terms-that-hurt

Thanks to Atlas Venture for supporting Venture Hacks this month. This post is by Fred Destin , one of Atlas’ general partners. If you like it, check out Fred’s blog and tweets @ fdestin . And if you want an intro to Atlas, send me an email. I’ll put you in touch if there’s a fit.

TechCrunch has a post today about TheFunded’s ideal first round term sheet. I think what Adeo Ressi is trying to do with TheFunded is great, and he has clearly been a leader in exposing VC shenanigans and simplifying term sheets.

TheFunded term sheet cdixon.org – chris dixon's blog

http://cdixon.org/2009/08/24/thefunded-term-sheet/

http://cdixon.org/2009/08/18/options-on-early-stage-companies/

I believe that what I’m about to say is accepted by venture capitalists as fact, even trivially obvious fact, yet very few entrepreneurs I meet seem to understand it. An option on a share of stock of an early stage company is (for all practical purposes) equal in value to a share in that early stage company.

Options on early stage companies cdixon.org – chris dixon's

Ideal first round funding terms cdixon.org – chris dixon's

My last 2 posts were about things to avoid, so I thought it might be helpful to follow up with something more positive. Having been part of or observed about 50 early stage deals, I have come to believe there is a clearly dominant set of deal terms. Here they are:

http://cdixon.org/2009/08/16/ideal-first-round-funding-terms/

http://markpincus.typepad.com/markpincus/2009/08/finally-getting-to-a-common-term-sheet-on-series-a-funding.html

Mark Pincus Blog: finally! getting to a common term sheet on ser

Mark is the founder, CEO and chief product officer of Zynga. He founded the company in 2007 with a mission of connecting the world through games, and in founding zynga.org, he also believes that games can do good. On his way to creating Zynga, Mark started three companies.

Adeo Ressi , founder of The Funded , a site where people rate venture capitalists and the Founder Institute , an incubator of sorts , has long ranted about what he calls “the atrocities of investors.”

The Funded Publishes Ideal First Round Term Sheet

Fred Wilson - The Ideal First Round Term Sheet

http://www.avc.com/a_vc/2009/08/the-ideal-first-round-term-sheet.html

Chris Dixon is killing it on his blog right now. My post on saturday was inspired by a blog post of his and I am going to repeat that today. Chris laid out the ideal set of first round terms and I agree with them. What's interesting is that Chris is a serial entrepreneur and I am a VC. And yet we agree on what the term sheet should say.