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VDR Ch. 4, Part 1: Economic Terms of the Term Sheet

August 1, 2017   |   By Vela Wood

Office Hours is a podcast hosted by Vela Wood venture attorneys Kevin Vela and Aaron Terwey covering general issues related to small businesses and startups. Venture Deals Review is a series of Office Hours episodes discussing the book Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist by Brad Feld and Jason Mendelson.

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In this episode, Kevin and Aaron review “Chapter 4: Economic Terms of the Term Sheet” and discuss why the difference between pre-money valuation and post-money valuation matters when negotiating with a VC, why price per share is critical in later financing docs, what is included in a fully-diluted basis, why accepting a lower valuation can be the best option, the difference between participating preferred stock and non-participating preferred stock, and why play-to-pay scenarios are no longer common.

Venture Glossary:

You can find definitions and examples of terms found in the book and this podcast in our Venture Glossary.

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You’ll want to bookmark Venture Glossary as a quick reference for navigating the venture world. We love talking about startups, so follow us on Twitter. And feel free to email us at podcasts@velawoodlaw.com with any comments or suggestions!


Posted in Podcasts, Venture Deals Review
Vela Wood
Vela Wood is a boutique corporate law firm that focuses our practice on M&A, emerging businesses, and venture transactions. As a one-time startup and now a small business ourselves, we are proud to represent the businesses and ideas that are fueling tomorrow's growth.