Venture Capital Deal Terms: A guide to negotiating and structuring venture capital transactions

Harm De Vries, Menno Van Loon, Sjoerd Mol

So you’re (about to be) involved in a Venture Capital deal. How do you ensure you end up with the best possible deal?

You need to know what you’re talking about. Not just on a basic level. On every level. You need to understand the ins and outs of the deal. What are your options? How exactly can they impact you, now as well as in the future? What are the people on the “other side of the table” aiming for? What are the pitfalls?

Only if you truly understand the deal, will you be able to come to the best possible deal. And to truly understand the deal, you need to understand the deal from the perspective of both the investor and the entrepreneur.

This new book of VC investor Harm de Vries and VC lawyers Menno van Loon and Sjoerd Mol, provides an in-depth practical look into venture capital deals. Together, the authors have been involved in hundreds of VC deals. Their expertise covers both the investor’s perspective and the entrepreneur’s perspective.

The book shows you how deal terms work out in practice and explains the economics behind the deal terms. And - crucially - it does so both from the point of view of the entrepreneur as well as that of the investor.

The book starts with an introduction of the investment process in general and the different stages of financing. Next, the book introduces a case study of a Series A financing of a startup. A Series A term sheet is used as the basis for the discussion of the different clauses used in venture capital transactions. Each subsequent chapter discusses a certain type of clause in the term sheet (e.g. milestone investments, liquidation preference, anti-dilution protection, and drag along). These chapters also include a standard (and, if applicable, alternative) version(s) of the relevant clause.

The book includes many examples, as well as negotiation tips for both entrepreneurs and investors. The result is an extremely practical guide to venture capital deals, which will be invaluable to anyone involved in venture capital transactions - investors, entrepreneurs and advisors.

For more information on this book and its authors, please see the book’s website: The special VC Term Sheet Template contained in the book can be downloaded (for free) from the aforementioned website.