Term Sheet Reviewer

---
name: term-sheet-reviewer
description: Reviews a venture financing term sheet before definitive documents are drafted, flagging terms that are commonly considered off-market or adverse to the reviewed side — always framed as the reviewer's own general commercial understanding requiring the user's own confirmation against current market data, never asserted as settled fact. Use this whenever a user has received or is negotiating a term sheet — including phrasings like "review this term sheet before we sign", "flag anything off-market in these terms", "is this anti-dilution provision unusual", "check this term sheet for founder-adverse clauses", or "what's missing from this term sheet for our stage". Distinct from investment-agreement-reviewer, which reviews the definitive SHA/SSA — this works from the shorter, earlier-stage document. Fires for any term sheet, letter of intent, or heads of terms for a venture financing round, from either side.
---

# Term Sheet Reviewer

## What this does

Reviews a venture financing term sheet before definitive documents are drafted: extracting every substantive term, flagging what is commonly considered off-market or adverse to the reviewed side, checking the term sheet's own binding or non-binding status, and noting what a complete term sheet at this stage would normally address but this one does not. Every "off-market" characterisation is framed explicitly as the reviewer's own general commercial understanding, not an asserted fact — market norms shift by stage and geography, and only the user's own current data can actually confirm one.

## Before you start

**The term sheet itself.** Blocking — there is nothing to extract or flag without it.

**Which side is being reviewed for.** Ask, even though this skill is commonly used to protect the founder side by default — do not assume.

Not blocking, ask once and proceed on what is confirmed: **the stage and geography the deal sits in.** Asserting a term is off-market requires knowing which market's norms are the reference point — Series A terms in one ecosystem are not Series A terms in another. Where this is not confirmed, keep every market characterisation explicitly general and flagged for the user's own verification.

## Method

**1. Read the whole term sheet once before flagging anything.** Term sheets are short, but their terms interact — a liquidation preference term changes meaning when read against an anti-dilution term, and flagging one without the other misses the combined effect.

**2. Extract every substantive term into a structured list before assessing any of them** — valuation, instrument type, board composition, protective provisions, liquidation preference, anti-dilution, vesting, rights of first refusal or first negotiation, drag-along, exclusivity or no-shop, information rights, and any founder-specific term.

**3. State what each term actually says, plainly, before judging it.**

**4. Flag terms commonly considered founder-adverse or off-market for the stage and geography given** — a full-ratchet anti-dilution mechanism, a participating preference with an uncapped multiple, an unusually broad list of protective provisions, a personal guarantee sought from a founder, an unusually long or open-ended exclusivity period. Frame every such flag explicitly as the reviewer's own general commercial understanding, and say the user should check it against their own current market data or precedent — never present it as a settled fact.

**5. Check the exclusivity or no-shop period and its expiry date specifically.** Flag if it is open-ended or unusually long, and note the deal-process risk this creates independent of any other term.

**6. Check whether the term sheet's own binding or non-binding status is clear.** A term sheet that is unusually detailed or drafted in binding language throughout risks being treated as more than a term sheet — this is the same concern mou-drafter treats as central, applied here to a document that commonly gets this wrong by accident rather than by design.

**7. Identify what a complete term sheet for this stage and deal type would normally address but this one does not**, framed as an open question for the user to raise, not as an assumed defect.

**8. Grade each flagged term** by how much it actually shifts control or economics away from the reviewed side — the same severity thinking used elsewhere in this practice pack, even without formal Critical/Material/Minor labels being required here.

## Output

**1. Header.** Side reviewed for, stage, deal summary, date.

**2. Term-by-term summary.** What the term sheet actually says, organised by category: valuation and instrument, control, economics, exit, and process terms.

**3. Flagged terms.** Off-market or adverse terms, with the reasoning, explicitly marked as the reviewer's own commercial understanding requiring the user's own market-data confirmation.

**4. Binding/non-binding check.** Whether the term sheet's own status is clear.

**5. What's missing.** Open questions a complete term sheet at this stage would normally address.

**6. Grading.** Each flagged term rated by how much it shifts control or economics away from the reviewed side.

**7. Points requiring verification.** Current market norms for the stage and geography, and any governing-law enforceability question the flagged terms raise.

## Do not

Do not assert that a term is off-market as an established fact. Frame it as general commercial understanding requiring the user's own confirmation against current market data.

Do not review terms one at a time without checking how they interact.

Do not draft replacement language here. This is a review and flagging skill — hand off to founders-agreement-drafter, investment-agreement-reviewer, or a negotiation-planning skill for that.

Do not assume which side is being reviewed for, even though this skill is commonly used for founder protection.

Do not treat the term sheet as binding or non-binding without checking what it actually says about its own status.