At Malpani Ventures, we value feedback received from founders and are always looking to improve our processes. A recent feedback we received was that our existing term-sheet was very verbose and presented in a legal (not easy to digest) manner for early-stage founders.

To dig deeper, we internally deliberated whether a simpler term sheet would be beneficial for founders vs a more detailed one:

→ Option 1: Simple Term Sheet with details discussed during Closing the SHA

Pros:

✅ Can speed up the process of closing the deal as negotiations can be streamlined during the SHA stage

✅ Allows for flexibility & adjustment to the deal terms based on further discussions/ DD

Cons:

❌ May lead to misunderstandings or disagreements during the closing stage if details were not discussed or clarified upfront

❌ The process may be perceived as less transparent, potentially causing mistrust or lack of clarity between parties

→ Option 2: Detailed Term Sheet Upfront

Pros:

✅Provides a clear understanding of the terms and expectations for both parties upfront

✅Can help build trust and transparency between parties by demonstrating a willingness to be upfront and transparent

Cons:

❌ May take longer to negotiate and finalize, potentially slowing down the deal closing process

❌ Could be seen as too rigid or inflexible, potentially causing friction if unexpected circumstances arise

We ran a couple of polls on LinkedIn and Twitter to gauge founder preferences:

While the numbers suggest a skew towards a detailed term-sheet, a significant number of founders do prefer a simple term sheet!

Founders, we heard you and have revised our term-sheet to a much simpler version whilst retaining explanations , wherever required. Our previous term sheet had ~3700 words across 9 pages - we have halved this to ~1900 words across 5 pages and also added a term sheet explainer.

You can access our revised term sheet here and the explainer here as well.

We would love your feedback on these resources!