What Jason Mendelson, Foundry Group says about topics vital to entrepreneurs
Jason Mendelson venture capitalist and Managing Director Foundry Group
Generally investors only care about returns and control when making investments.
“[Entrepreneurs] should focus on terms like pre-money valuation, liquidation preferences, board of director elections, drag-along rights and protective provisions. Most [other standard term sheet terms] aren’t really all that important.  Many of these terms have interdependencies and it’s important [to] understand how terms such as option pools, warrant grants and the election of independent board members will affect returns and control.” Jason Mendelson, Do More Faster by David Cohen & Brad Feld copyrt 2011, Get Help with your Term Sheet pg 238
Jason Mendelson Venture Capitalist and Managing Director Foundry Group
“In general, there are only two things that investors really care about when making investments: returns and control. Returns refer to the end-of-the-day financial return the investor will get and the terms that have direct impact on these economics. Control refers to mechanisms that allow the investors to either affirmatively exercise control over the business or to veto certain decisions the company can make.” Mendelson says that if an investor resists terms that don’t impact returns or control, it may be a negotiating tactic, he may not be savvy or could just be a jackass. Jason Mendelson, Do More Faster by David Cohen & Brad Feld copyrt 2011, Get Help with your Term Sheet pg 238