If all of the “advice” your read on VC term sheets is written by investors, you need to diversify what you’re reading.

Avoid Short Term Sheets – Inexperienced founders are often led to believe that the shorter/simpler the term sheet, the better. This is categorically wrong. Once you’ve signed a term sheet, you are in a far worse negotiating position than pre-signing because a no-shop provision “locks” you into the deal. By signing a simplified term sheet that glosses over important economic and control-related nuances, you are punting negotiation of material issues to an environment where you are disadvantaged. You will save far more in legal fees, and get a fairer deal, by spending extra time negotiating at the term sheet stage (with a trustworthy, experienced lawyer), because it will streamline drafting post-signing; but a lot of investors say the opposite because it’s in their interest to do so.

The Problem with “Standard” Term Sheets (including YC’s) – Every few years another investor-run organization or law firm heavily dependent on VC-side deal flow comes out with what they call a “standard” or “clean” term sheet, and invariably what they chose to label a “standard” reflects all kinds of biases that favor investors. YC’s term sheet is no different. This is a deep-dive into the problem with the general concept of “standard” terms, as (always) defined by the investor community, and specifically into the problems with YC’s template.

Negotiation is Relationship Building – Aggressive but clever investors will utilize a number of rhetorical carrots and sticks to get inexperienced teams to rush negotiation. For example, they’ll claim that it’ll save you a lot of money (in legal fees) if you choose their preferred lawyer to negotiate for you. Just overlook the conflicts of interest. Others will accuse you of “nitpicking” on issues that less biased people will acknowledge are important, but young teams are often not experienced enough to appreciate. All of these tactics are revealing as to what you can expect in the startup-investor relationship with them going forward.