Founder answers
Is my term sheet standard? The terms to check first
Short answer
The terms that most affect your outcome are the liquidation preference (a 1× non-participating preference is the clean, standard default) and anti-dilution. Pro-rata rights and a single board seat at seed are normal; a participating preference is the main thing to push back on.
Check the liquidation preference first
A 1× non-participating preference lets the investor take the better of their money back or converting to common — not both. That’s standard. A participating preference (“double dip”) takes the money back AND a share of the rest, and can quietly cost founders a lot on a modest exit.
Then anti-dilution, pro-rata, board
Broad-based weighted-average anti-dilution is standard; full-ratchet is aggressive. Pro-rata rights are normal. One board seat at seed is common — think about control as you add more.
Common questions
What is a standard liquidation preference?
1× non-participating — the investor takes the better of their money back or converting, not both.
Is full-ratchet anti-dilution normal?
No — broad-based weighted-average is the standard; full-ratchet is investor-aggressive and worth negotiating.
Stop reading, start building — the lesson lets you model this with your own numbers.
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