Just Say No: VC terms that can really hurt

Helpful points.

The problem in today's VC environment is that "terms that can really hurt" are front and center in the typical term sheets. Perhaps the most abusive of all is the aggressive imposition of reverse vesting without protections of any kind for the entrepreneur from arbitrary terminations. Throw in abusive liquidation preferences, etc. and the result is that entrepreneurs should be very selective in doing VC deals. Until this climate changes for the better, do them only after you have built significant value in your company and have reasonable leverage in negotiating terms.