Viewing profile — jasonkwon

Network effects don't just exist in tech. Delaware has the most developed corporate law and support services for corporate transactions (you can file charters, mergers, etc. within…

Yes, this.

The term sheet we posted is just meant to show what a pretty good term sheet looks like from a good investor. The investor having its legal fees reimbursed by the company is someth…

Re-vesting schedules are all over the map. Some amount of re-vesting is often required at Series A, but it largely has to do with how vested the founders already are. If for exampl…

Theoretically this would appear to be true. In practice, the firms that give 1-pagers don't really try to pull a bait and switch like that. They offer the 1-pager so they can close…

Major investors concept (investor has to have invested at least $X) is often added in the definitives. Longer term sheets just state a threshold dollar amount; shorter ones (like t…

It can be legally binding.

You can make arguments like this in negotiations and sometimes they can work. It just depends. As I mentioned elsewhere, this was meant to be more descriptive than prescriptive. Fo…

Existing employee vesting is generally left alone unless they have something crazy.

I think it just comes down to risk preferences. If you optimize for a higher valuation and give the investor downside protection for that, then you own more of the business and the…

probably true

Annual and quarterly unaudited is normally implied. Sometimes monthly too. Most good Series A investors understand that audited financials don't make sense this early and their law…

I'm going to answer this question a little differently, because enforceability can also depend on facts and circumstances. Think of the binding / non-binding distinction as more of…

We send people that link all the time to help them understand option pools. The main point of that post is to make it clear to founders that when an investor is saying they'll inve…

I wouldn't talk in absolutes because having a ton of negotiating leverage can make everything fair game. But in an run of the mill deal, it's pretty tough to make a VC give up anyt…

descriptive, but note the comment about the brackets.

I think you already answered that question in your post. There would be incrementally more proceeds for the founders and employees in an exit that is flat or below the postmoney va…

Yeah excessive preferences do exactly this. But it's not the preference mechanism as much as what the preference does in relation to business value. Assuming liquidation preference…

Good question. The anti-dilution right is an adjustment to the investor's shares that occurs when the company does a down-round. The "broad-based" qualifier is a reference to the m…

Some minor wordsmithing that reflects lawyer and investor /founder preferences happens a fair amount. The veto on company sales breaks founder friendly occasionally (you need a dec…

It’s meant to provide transparency on what good and clean terms are. It won’t generate negotiating leverage for you if you don’t have any, though on the margins it might help you p…

The impact on safe investors will be less than in those 2 models because those models assume no pool, ie no hires between Safes and Series A. That’s why I said it was artificial, a…

yes, that's what we meant by the percentages.

I answered your first model comparison with point #1. Can't use it here since I don't know what other scenarios you're modeling out. I think points #2 and #3 continue to apply. You…

Sure - just sent to you.