ACQ2: The Acquired Interviews

Ben & David take their turn at the "power ballad" of VC blogging/podcasting, explaining how venture term sheets work. From valuation to pro rata rights to founder vesting, we leave no stone unturned in this episode. If you're a founder, work at a startup, or are considering doing one of those someday, this episode is for you!


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Links from the Show:

Acquired LP: Lyft Episode

Acquired LP: Demystifying Corp Dev (Sara Adler)

AR&D Letter of Intent to DEC         

Brad Feld: Venture Deals


Jeff Bezos, Vesting, and The Divorce                      

Perkins Coie Accelerator

Standard Series Seed Term Sheet [Link in Bio]


Show Bookmarks:

02:46: What is a Term Sheet? What is it for? When does it happen?

06:02: The History of Term Sheets

07:50: Timeline of Term Sheets

09:30: Who is responsible for the definitive documents?

12:40: Breaking down the Standard Series Seed Term Sheet [The 95%]

14:40: How is Valuation and Dilution determined? How does it work?

22:22: What is an Option Pool?

26:41: What is the standard for Option Pool duration?

27:50: How do I plan for fund-raising for my business?

31:59: The rest of the Term Sheet [The last 5%]

32:25: Liquidation Preference

35:22: Voting Rights, Voting Events, and Control Terms

40:10: The Costs of Investing and other Financial Information

43:55: What are Participation Rights?

48:03: The Costs of Investing revisited

50:17: Key Holder Matters / Founder Vesting / Resetting Vesting

56:05: Acceleration and M&A

58:53: Binding Terms and Wrap Up

61:37: Acquired LP - Lyft Episode Follow Up


People Worth Knowing:

Brad Feld

George Soros

Greg McAdoo

Jeff Bezos

Jon McNeill

Carl Icahn

Logan Green

Louis Gonda

MacKenzie Bezos

Philip Deutch

Saraa Adler

Ted Wang


Companies Mentioned in Episode:

Avis Rental Car


Cowboy Ventures

Digital Equipment Corporation

Enterprise Rent A Car

Fenwick and West


Lexington Ventures

Lyft (ZimRide)

Oasis Investment Partners

Social Capital

Zip Car


Episode Specific Terms:


Aggregate Proceeds


Binding Terms

Board of Directors & Lead Investor

Change Number Directors

Control Term vs Economic Terms

Declare Dividends

Definitive Documents

Documentation Terms

Earn Outs

Financial Information

Founder Vesting [Resetting Vesting]

Fundraising Expenses

Future Rights


Guard Rails [leaving room for other investors]

Liquidate or Dissolve Approval

Liquidation Preference and Preferred Stock

Liquidity Event

Market Terms

Option Pool

Participation Rights

Pre Money vs Post Money Valuation

Preference Stack

Preferred Stock vs Common Stock

Priced Round

Redeem/Repurchase Shares


Securities To Issue

Term Sheet

Valuation Term



Ben and David’s Affiliations:

Wave Capital, @WaveCapitalVC

PSL, @psl

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What is ACQ2: The Acquired Interviews?

ACQ2 is Ben and David's conversations with expert founders and investors. Acquired the stories of great companies — and ACQ2 dives deeper into the lessons we can learn from them, often with the protagonists themselves.