Founder's Fund Transparent Term Sheet

http://www.foundersfund.com/termsheet/

by jfc • 14 years ago

74 14 14 years ago

sdpurtill3• 14 years ago

Longtime HN member here. We created this project at Founders Fund over the last month and a half to give startup founders and employees an idea of the economic ramifications that follow from a term sheet. We have thoroughly vetted the underying model from some of the top attorneys in the valley and hope this can become a go-to for those raising money.

All comments and questions are welcome, I'll be here all day.

wtvanhest3• 14 years ago

Why does changing the option pool % not impact any of the calculations?

[ADDED] (maybe there should be an error if premoney valuation pool + owner's equity >100%?)

sdpurtill3• 14 years ago

I assume you mean the existing option pool. Try changing the pool update to "post" (the radio button at the bottom) and you will see the outcomes change.

Hypothetically, you could own 100% of your company and have an option pool of x% and never allocate it to anyone, leaving you with full ownership of the company.

jfc• 14 years ago

This model is really helpful, as is the plain English guide also on that page - http://www.foundersfund.com/uploads/term_sheet_explained.pdf

You've made life a little easier for many startup founders with this. Thank you.

jesseclay• 14 years ago

Awesome calculator that helps to demystify an area that has been needlessly confusing and opaque!

gojomo• 14 years ago

Nice tool!

Rather than providing one exit value, a graph over a range could be helpful, to illustrate key thresholds, like the slope-change introduced by preferences or the exit values needed to provide the founders/VCs a particular return.

Also, adding an optional 'months to exit' would allow displaying the effective internal rates-of-return for a given exit value.

rabbitonrails• 14 years ago

There's also http://preferredreturn.com/calculator that has the graphing you describe and the ability to add multiple rounds. However, the FF one has a better interface for convertible debt & early stage.

rbedi• 14 years ago

This is a great tool! Nice work. I posted a similar tool on HN a while ago, which can be helpful if you want to click into the spreadsheet to see the calculations.

http://news.ycombinator.com/item?id=4263459

001sky• 14 years ago

"The world's most irritating not-quite contract"

The Big picture is often a function of fine details.

josdewolk• 14 years ago

Dear Founder's Fund team, thank you for creating this.

nrmehta• 14 years ago

So awesome. Nice work and very good for the startup community. One minor "nice to have" request would be to show the VC Series A ownership in a dynamic calc. Since many VCs optimize for 20% ownership or whatever, it's helpful to plan out various scenarios to see the ownership there (obviously it's easy to calculate so no big deal but might be helpful).

Founder's Fund Transparent Term Sheet

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