Thread by @zns2101

🔥 MYTH: Standard term sheets give founders the rights they need to lead their companies.

THREAD...

#DisruptSF #FounderFriendlyStandard

1/ To build for the long term, founders need to consider their company's management structure. It's easy to ignore when trying to develop a product, build a team, and raise money, but ignoring governance can come back to haunt you.

2/ It’s easy for founders to be seduced by unicorn dreams and focus on valuations, but it’s critical to stay conscious of shareholder voting rights and what the board of directors will look like and the control the board will have over the #startup.

3/ When the fundraising afterglow fades, and a company hits bumps in the road, founders are going to want alignment with their investors on strategic direction and how to make tough decisions.

4/ The standard #VC #angelinvestor documents and a lot of term sheets out there can sidestep these issues, and founders might ignore them or assume they’re not important – but the issues are critical to enabling founders to execute on their visions.

5/ @kadambloom, @KeithStrahan, @JRohlederLaw, @rlj_law, and I analyzed the top documents for #startup funding. You can see how they compare to #FounderFriendlyStandard: eisaiah.blog/founder-friend…

6/ A founder should remember that his or her passion, company, and entire financial future may be more like a lottery ticket to a VC. There can be situations where incentives aren’t fully aligned.

Standard term sheets often give investors the power.

7/ Experienced founders, what words of caution would you share with the #DisruptSF audience and beyond about working with angel investors and VCs?

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Passing the mic 🎤