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term-sheet-explainer

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Decodes every clause of a VC term sheet into plain English, marks each term founder-favorable, market-standard, or investor-favorable, and flags deviations in priority order. Use when a founder asks "what does liquidation preference mean", "is this term sheet normal", "explain participating preferred", "what is the option pool shuffle", or receives a term sheet and needs to understand it before responding. Do NOT use for planning counters, trades, and negotiation strategy - use term-sheet-negotiation instead; do NOT use for choosing between a SAFE and a priced round - use safe-vs-priced-round instead.

skills/term-sheet-explainer/SKILL.md

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# Term Sheet Explainer

A term sheet is non-binding but path-dependent - what gets signed here sets the template for every future round. The costly mistake this skill prevents is signing terms the founder never actually understood: fixating on the valuation headline while participating preferred or an investor-controlled board rides through unread. This skill translates the jargon and grades each term; the negotiating itself belongs to term-sheet-negotiation.

## Operating procedure

1. Collect the inputs below before explaining anything - a term reads differently at pre-seed than at Series A.
2. Sort every term in the sheet into one of two buckets: **economics** (who gets what money) or **control** (who decides what). Economics is negotiated for fairness; control is negotiated for survival. Founders who only fight over valuation often give away the company.
3. For each term, produce three things: the plain-English meaning, the market-standard position for this stage, and this sheet's position graded founder-favorable / standard / investor-favorable.
4. Run the red-flags checklist. Any hit goes to the top of the output.
5. Assemble the clause-by-clause table (deliverable below), flag deviations in priority order, and hand it to term-sheet-negotiation for the counter strategy. Model ownership impact in cap-table-manager.

### Step 1: gather inputs
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