Pick three term sheet fights, sign the rest: the clauses that outlive the round

One question does the sorting: whether you will still be living with the term in three years, or whether it bites only in a single scenario you can price this week ^[1].

Liquidation preference is the clean case. Cooley ranks it as usually the next most important business issue after valuation, and notes that it is often mistaken for a legal point and glossed over ^[8][9]. What earns it a slot is not the drafting, it is the replication: terms agreed at Series A often carry over into Series B and beyond ^[11]. A clause that copies itself into your next two rounds has stopped being a clause and become a default setting.

The same guidance hands founders a counter that mostly goes unused. Because Series A terms travel forward and can end up working against the Series A investors themselves later on, that carry-over is available as leverage to keep a term out in the first place ^[12]. The person across the table has a reason to agree with you.

Before any markup, model expected exit values so you know the dollar gap between the preference formulas on offer ^[10]. Do that and the sorting largely happens on its own: a provision that moves the founder outcome by a rounding error at every exit value you consider does not deserve an email, let alone two passes of redlines.

Valuation takes the first slot, and Cooley's warning there is mechanical rather than philosophical: understand what including the option pool inside the fully diluted pre-money number does to your side of the cap table ^[5][6]. The guidance also states the trade plainly, that a lower valuation from a great investor may be better than a higher one from a bad investor ^[7].

Which leaves one slot ^[16]. The material names valuation and preference, says the list is not exhaustive, and points to advisors and other published resources for the rest ^[14][15]. So the third is yours to nominate, and the test is the same: what governs who can block a decision, and what happens when the company is sold. A term that fails that test is a line on an invoice.

The reason speed here is not surrender is structural. Cooley draws the contrast with M&A, where parties float red herring issues to pull attention away from the real ones, and points out that an investment is different because the two sides have to work together intensely after closing ^[13]. The negotiation is a sample of your judgment taken before you become colleagues. Sign everything and you lose credibility with the investor ^[2]. Contest everything and you look inexperienced while both sides lose the thread ^[3].