Let’s say you’re a first-time entrepreneur and you’ve hit on an idea that is getting some traction and attracting the attention of VCs. You do some research online to familiarize yourself with customary terms and finally get a term sheet from a reputable VC at a valuation you think is fair. Next comes the fun part – negotiating the term sheet. Negotiating term sheets should be straightforward, but sometimes when you combine first-time entrepreneurs with inexperienced counsel, the results can be toxic.
This is a good reference on where to start when dealing with negotiating term sheets.