Article · 35 min read

Term Sheet Analysis: The Most Important Document You'll Sign (The Founder's Guide to Startup Funding in the Indian Ecosystem)

Niraj Kumar · The Founder's Guide to Startup Funding (Indian Ecosystem) Free Intermediate India

This is the clause-by-clause decoder written for Indian reality, not a US template retrofitted. It runs the founder-payout math on 1x non-participating vs participating vs predatory multiples at a $50M exit and a $15M down exit, contrasts broad-based weighted-average against full-ratchet anti-dilution with the actual conversion-price numbers ($2.40 vs $1.50), and shows the pre-money vs post-money option-pool shuffle diluting only founders. Then it layers on what US guides skip: CCPS and CCD structures, RBI pricing guidelines and the FC-GPR filing deadline, and Press Note 3, so you know which clauses are negotiable and which are regulatory.

  • An Indian term sheet is a CCPS/CCD instrument under FEMA, so RBI pricing rules and the FC-GPR filing shape terms that never appear in a US template
  • Worked payout tables show participating preferred and full-ratchet anti-dilution can wipe out founder proceeds even on a healthy exit
  • DPIIT recognition and pool sizing to real 12 to 18 month hiring needs are concrete levers to push back on the pool shuffle
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It answers 2 questions

  1. What are the key deal terms in a seed term sheet, and which ones actually matter?
  2. What are the term sheet clauses that quietly cost founders the most?

Read with it

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