Found in 4 comments on Hacker News
jfarmer · 2014-10-22 · Original thread
> In that case, what would be the key difference between a clean term vs a messy one?

In my experience, terms with lots of if-then conditionals are the most common flag. The last "messy" term sheet I saw had an unusually long diligence period. Predictably, the investor "found" a bunch of problems at the 11th hour and pulled out, leaving the startup in a financial lurch.

Anything that differs from standard docs should be _highly_ suspect, assuming you can get ahold of some.

As a lower bound, I've never seen terms presented on Shark Tank that weren't off-the-wall insane. :D

> How would a first time founder tell the difference?

By talking to other founders, advisors, and their attorneys. This book was useful when I was approaching the first term sheets I ever saw:

mindcrime · 2014-03-19 · Original thread

I believe any one or more of those will get you going in the right direction. All of those I've either read, or have seen recommended highly enough by people I trust, that I feel comfortable recommending them. The Guy Kawasaki book is a good, basic introduction to starting a startup, although it's a little old now. I think most of it is still relevant though.

A lot of this stuff is probably on the 'net as well, but you may have to dig around for it a bit. Quora has a lot of good questions (and good answers) on VC / startup topics, so that might be worth a look. Also, a number of high profile VCs maintain blogs where they share a lot of useful information. Mark Suster comes to mind ( and does Brad Feld ( Note that Brad Feld is the author of one of the above books.

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