Ben & David take their turn at the "power ballad" of VC blogging/podcasting, explaining how venture term sheets work. From valuation to pro rata rights to founder vesting, we leave no stone unturned in this episode. If you're a founder, work at a startup, or are considering doing one of those someday, this episode is for you!   Be sure to follow the Acquired Podcast: Acquired.fm @AcquiredFM Let People Know You’re An LP on Twitter!     Links from the Show: Acquired LP: Lyft Episode Acquired LP: Demystifying Corp Dev (Sara Adler) AR&D Letter of Intent to DEC          Brad Feld: Venture Deals CooleyGo.com GAAP Jeff Bezos, Vesting, and The Divorce                       Perkins Coie Accelerator SeriesSeed.com Standard Series Seed Term Sheet [Link in Bio]   Show Bookmarks: 02:46: What is a Term Sheet? What is it for? When does it happen? 06:02: The History of Term Sheets 07:50: Timeline of Term Sheets 09:30: Who is responsible for the definitive documents? 12:40: Breaking down the Standard Series Seed Term Sheet [The 95%] 14:40: How is Valuation and Dilution determined? How does it work? 22:22: What is an Option Pool? 26:41: What is the standard for Option Pool duration? 27:50: How do I plan for fund-raising for my business? 31:59: The rest of the Term Sheet [The last 5%] 32:25: Liquidation Preference 35:22: Voting Rights, Voting Events, and Control Terms 40:10: The Costs of Investing and other Financial Information 43:55: What are Participation Rights? 48:03: The Costs of Investing revisited 50:17: Key Holder Matters / Founder Vesting / Resetting Vesting 56:05: Acceleration and M&A 58:53: Binding Terms and Wrap Up 61:37: Acquired LP - Lyft Episode Follow Up   People Worth Knowing: Brad Feld George Soros Greg McAdoo Jeff Bezos Jon McNeill Carl Icahn Logan Green Louis Gonda MacKenzie Bezos Philip Deutch Saraa Adler Ted Wang   Companies Mentioned in Episode: Avis Rental Car Cooley Cowboy Ventures Digital Equipment Corporation Enterprise Rent A Car Fenwick and West Github Lexington Ventures Lyft (ZimRide) Oasis Investment Partners Social Capital Zip Car   Episode Specific Terms: Acceleration Aggregate Proceeds Alignment Binding Terms Board of Directors & Lead Investor Change Number Directors Control Term vs Economic Terms Declare Dividends Definitive Documents Documentation Terms Earn Outs Financial Information Founder Vesting [Resetting Vesting] Fundraising Expenses Future Rights GAAP Guard Rails [leaving room for other investors] Liquidate or Dissolve Approval Liquidation Preference and Preferred Stock Liquidity Event Market Terms Option Pool Participation Rights Pre Money vs Post Money Valuation Preference Stack Preferred Stock vs Common Stock Priced Round Redeem/Repurchase Shares Runway Securities To Issue Term Sheet Valuation Term     Ben and David’s Affiliations: Wave Capital, @WaveCapitalVC PSL, @psl Follow Acquired: @AcquiredFM, acquired.fm Let People Know You’re an LP on Twitter! Suggestions and Feedback:acquiredfm@gmail.com