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The last ten years have been good for startup founders. Deals became less structured as term sheets became shorter. The exit window was wide open and the capital was abundant. The market is going up and to the right.
Deals are going to look very different now that investor money isn't flowing as freely.
If market conditions continue to sour, some VCs may look to introduce language into their term sheets to help de-risk their investments.
Stephan Osborn is a member of the Mintz law firm and has experience in the last two startup downturns. Many current venture investors were not in this industry a decade ago.
As they look to raise in a changed market, there are some things they should keep in mind.
Many of the potential risk protections will be economic. Liquidation preferences will be one area that will come up more.
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