Young entrepreneurs (at age or at heart – It doesn’t matter) are very sensitive about valuation or in their eyes: “how much I’m going to get diluted”. After doing several deals both as co-founder and as investor, it became clear to me that it’s the wrong thing to focus on. Moreover, in such an early stage of a startup, no one can do a valuation. It’s all guesses. So the numbers and the arguments over them are ridiculous. What I do find important, are the terms. The ‘little’ details in the term sheet that will drive the future outcomes.

Terms matter

You need to understand what is the meaning of each basic concept like: liquidation, participation, ratchets and preferred shares.
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