Term sheet scoring.

Term sheet analysis calculator scores how founder-friendly an investment offer is. 2M investment at 8M pre-money valuation, 1x liquidation pref, weighted average anti-dilution, 1 board seat = founder-friendly. 2M at same valuation but 2x participating preference, full ratchet anti-dilution, 3 board seats = punitive.

Example: 2M investment at 8M pre-money. Investor ownership: 2M / 10M = 20%. Founder-friendly score: 100 baseline. 1x non-participating preference: no penalty. Weighted average anti-dilution: no penalty. 1 board seat: no penalty. Final score: 100/100 - very founder-friendly. Same deal at 2x participating + full ratchet + 3 seats: 30/100 - very investor-favorable.

Key term sheet items to negotiate: (1) Valuation (pre-money). (2) Liquidation preference (1x non-participating standard). (3) Anti-dilution (weighted average broad-based, NOT full ratchet). (4) Board composition (founder control crucial). (5) Pro-rata rights. (6) Drag-along provisions. (7) Information rights. (8) Vesting acceleration. Engage experienced startup lawyer (Cooley, WSGR, Orrick in; Bird & Bird, Taylor Wessing in). Term sheet shapes company governance for life.

Run it with sensible defaults

Using investment amount of 2,000,000, pre-money valuation of 8,000,000, liquidation preference multiple of 1, anti-dilution of 1, the calculation works out to 100/100. Nudge the inputs toward your own situation and the output recalculates instantly. The defaults are meant as a starting point, not a recommendation.

The levers in this calculation

The inputs — Investment Amount, Pre-Money Valuation, Liquidation Preference Multiple, Anti-Dilution (1=Weighted, 2=Ratchet), and Investor Board Seats — do not pull with equal force. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.

How the math works

100-point baseline. Deductions: high liq pref (-30 per multiple above 1x), full ratchet (-25), >2 board seats (-15). The working is transparent — you can verify every step yourself in the formula section below. No black box, no opaque "proprietary model".

Why investors run this

Most people's intuition for compounding is wrong — not because the math is hard, but because linear thinking doesn't account for curves. Running numbers through a calculator like this one is the cheapest way to recalibrate that intuition before making an irreversible decision about contribution rate, asset mix, or retirement age.

What this doesn't capture

Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. Treat the number as one scenario, not a forecast.