Term Sheet Comparison
Compare two term sheets on the numbers that actually pay out, not the headline valuation.
Side by side
| Metric | Offer A | Offer B |
|---|---|---|
| Post-money valuation | $10,000,000 | $12,000,000 |
| Investor ownership | 20.0% | 16.7% |
| Founder ownership after deal | 70.0%: best for founders | 68.3% |
| Founders take home at $10,000,000 exit | $7,000,000 | $5,466,667 |
| Founders take home at $50,000,000 exit | $35,000,000 | $32,800,000 |
| Founders take home at $100,000,000 exit | $70,000,000 | $66,966,667 |
| Board seats | 1 | 2 |
A pool created before the round comes out of the founders’ side; a pool created after the round dilutes everyone. Investor ownership = amount ÷ post-money. At exit, the investor takes their preference first; if participating, they also take their ownership share of what is left, and founders split the rest with the option pool. Ignores seniority layers, options, and debt.
Educational estimate, not legal or financial advice.
How it works
Compare offers in 3 steps
Enter each offer's amount raised, pre-money valuation, option pool, liquidation preference and board seats.
Set whether each pool is created before the round and whether each preference is participating.
Compare your ownership and what you take home at $10M, $50M and $100M exits, side by side.
Worked example
An $8M offer vs a $10M offer
Inputs
- Offer A
- $2,000,000 at $8,000,000 pre, 10% pool, 1x non-participating
- Offer B
- $2,000,000 at $10,000,000 pre, 15% pool, 1x participating
Result
- Founders keep
- 70% (A) vs 68.3% (B)
- At a $50M exit
- $35,000,000 (A) vs $32,800,000 (B)
The lower valuation is the better deal.
How we got there
Offer A is $2,000,000 at an $8,000,000 pre-money valuation, with a 10% option pool created before the round and a 1x non-participating preference. Offer B is $2,000,000 at a $10,000,000 pre-money valuation, with a 15% pool and a 1x participating preference.
Offer B looks better, but founders keep 70% with Offer A and only about 68.3% with Offer B. At a $50,000,000 exit, founders take home $35,000,000 with Offer A and about $32,800,000 with Offer B. The lower valuation is the better deal.
Reading your result
Which offer is really better?
Good sign
Clean terms you can explain in one sentence.
Red flag
A higher valuation that comes with a bigger pool or participation.
The highest valuation is not always the best offer. A bigger option pool, a participating preference or a higher preference multiple can quietly cost you more than a lower valuation would.
Look at every exit value. Terms that look harmless at a big exit can take a large share of a smaller one, which is the more likely outcome.
FAQ
Term sheet questions founders ask
Compare what you actually own after the round and what you would take home at realistic exit values, not just the headline valuation.
The option pool, the liquidation preference, participation, board seats and protective provisions.
No. It can come with tougher terms, and it raises the bar for your next round.
Typically a 1x non-participating preference, a reasonable option pool sized for your hiring plan, and balanced board control.
Yes. Always have a startup lawyer review a term sheet before you sign. This calculator helps you understand it, not replace legal advice.