Compare startup investor term sheets and what I'm giving up
A side-by-side comparison of equity term sheets in plain English, showing dilution, control, and downside economics.
The prompt
Help me compare equity term sheets from investors.
Term sheets: [PASTE key terms from each, or the full text]
Current cap table summary: [founders, employees, option pool, prior investors - percentages]
Amount I need to raise and why: [AMOUNT and runway goal]
What matters most to me: [e.g. "control", "valuation", "investor's help", "speed to close"]
What I know about each investor: [reputation, partner, follow-on capacity]
For each term sheet, explain in plain English and compare in a table:
- Pre-money and post-money valuation, and whether the option pool increase is in the pre-money (which dilutes existing holders, not the new investor).
- Founder ownership after the round.
- Liquidation preference (multiple, participating or non-participating) and what I'd receive in a sale at three example exit values: [LOW / MID / HIGH].
- Anti-dilution protection type.
- Board composition and who controls it.
- Protective provisions and veto rights.
- Pro rata, information rights, and any unusual terms (redemption, drag-along, founder vesting reset, exclusivity period).
Then:
1. Rank the term sheets on economics and on control, separately.
2. Flag terms that are off-market or deserve pushback, and suggest a reasonable counter.
3. List questions to ask each investor and their references.
Show the math for the exit scenarios. This is general information, not legal or financial advice: have a startup lawyer review terms before I sign anything.
Highlighted [brackets] are blanks to replace with your own details.
Fill in the blanks and use this promptMore Finance & Accounting prompts
What to fill in
- PASTE key terms from each, or the full text
- AMOUNT and runway goal
- reputation, partner, follow-on capacity
- LOW / MID / HIGH
How this prompt is built
This prompt follows the RTF structure (Role, Task, Format). RTF tells the model who to be, what to do and what shape the answer should take. It is the quickest structure that still gives noticeably better results than a bare request.
Related prompts
- Break down revenue and margin changes into price, volume, and mixA price-volume-mix bridge that shows exactly why revenue and gross margin moved between two periods.
- Explain what changed between two versions of my forecastA forecast-to-forecast walk that shows what changed, why, and whether the change is real or just timing.
- Explain budget vs. actual variancesAnalyzes variances and writes the commentary management needs.
- Analyze financial statementsReads a P&L, balance sheet, and cash flow statement and summarizes performance, health, and risks.