Understanding the terms of the deal is crucial. Here are some elements to consider:
Valuation: A higher valuation means less dilution. Aim for a fair but optimistic valuation. Equity Vesting: Ensure that vesting schedules align with long-term goals. Four-year vesting with a one-year cliff is a common structure. Liquidation Preferences: Be cautious of terms that prioritize investor returns over common shareholders during liquidation events. Board Seats: Retaining board control or having a balanced board can help maintain strategic direction.