What do entrepreneurs need to know about term sheets in order to get a deal done?

William Bernat: Term sheets are not “one size fits all.” Since most of a term sheet’s provisions are meant to protect the investors’ investment, it’s not uncommon for investors and founders to have vastly different expectations of what a deal will look like. Getting a signed term sheet is one of the biggest early milestones for a company to achieve, but it doesn’t guarantee an investment—that comes only when the parties are able to agree on the definitive deal documents that spell out the specific provisions in the term sheet, among other matters. Founders need to understand that every provision in a term sheet is included for a specific reason and each generally works in concert with the others, meaning that modifying the terms in one section will likely have a rippling effect elsewhere.