# Prepare my data room and understand my term sheet basics

A due-diligence data room checklist plus a plain-language guide to key terms and questions for your lawyer.

- Topic: Legal & Compliance
- Framework: RTF
- Level: Standard
- Tags: Legal, Finance, Fill-in Template
- Source: https://www.thinkwithprompt.com/prompts/prepare-my-data-room-and-understand-my-term-sheet-basics

## Prompt

```text
Help me prepare for due diligence and understand the main terms in my first funding round.

**Company type and where it's incorporated:** [DETAILS]
**Round and instrument:** [SAFE / convertible note / priced equity; amount]
**Cap table today:** [founders, option pool, prior investors - or "not set up yet"]
**Term sheet or SAFE terms received (optional):** [PASTE]
**What's messy:** [e.g. "IP created before incorporation," "a contractor without a signed agreement"]
**Previous step (optional):** [PASTE my investor meeting notes and follow-ups promised]

Give me:
1. A data room checklist by folder: company formation documents, cap table, founder and employee agreements (including IP assignment), customer and supplier contracts, financials and projections, product and IP, compliance and policies, and the deck. Mark each as must-have now vs. can wait.
2. A clean-up list for anything messy I mentioned, and the order to fix it in.
3. A plain-language glossary of terms I may see (valuation cap, discount, pro rata, pre- vs. post-money, liquidation preference, board seats, option pool, vesting, information rights) with what each means for me in practice.
4. If I pasted terms: summarize what they say and list questions to raise with my lawyer. Don't call terms standard or market unless I've given you a source to compare against.
5. A closing checklist: signatures, wire details verified by phone, cap table update, filings.

This is general information, not legal or tax advice. Have a startup lawyer review all documents before signing, and an accountant review any tax or securities filing questions.
```

## What to fill in

- DETAILS
- SAFE / convertible note / priced equity; amount
- founders, option pool, prior investors - or "not set up yet"
- PASTE
- PASTE my investor meeting notes and follow-ups promised

Free to copy and use. From ThinkWithPrompt (https://www.thinkwithprompt.com/), a library of 2,663 curated AI prompts.