David Frankel, Founding Partner at Altirah Capital, discusses term sheets and how to structure a venture capital deal. Frankel suggests that when raising money an entrepreneur should 1) Favor VCs with simple term sheets, 2) Retain an experienced startup lawyer and 3) Explore any unfamiliar terms.

David Frankel, Founding Partner at Altirah Capital, suggests that in established venture environments, VC investors and entrepreneurs share common assumptions about what makes a fair investment deal. In emerging economies these rules of thumb have not been established and so raising money can take more time or be more challenging.

David Frankel, Founding Partner at Altirah Capital, cautions against raising too much money in an early round for two reasons. First, if things go poorly and the firm receives a lower valuation in the next round (down round) then substantially funding the venture will be difficult. Second, if you raise an appropriate amount of money in an early round and things go well you can always raise more money in a later round at a higher valuation.

David Frankel, Founding Partner at Altirah Capital, offers his advice about what entrepreneurs should expect and what they should avoid in the term sheets offered by VCs when raising money. Frenkel suggests that entrepreneurs should expect VCs to have liquidation preferences, pre-emptive rights, first refusal rights, anti-dilution rights, board member seats, CEO replacement rights and full disclosure. In contrast, Frenkel suggests entrepreneurs should not accept a big valuation from an individual investor who cannot follow on or ?traditional terms? that are not adequately explained and justified.

Jason Green, David Frankel and Michael Cline, the Founding Partners at Emergence Capital, Altirah Capital and Accretive Technology Partners respectively, discuss the qualities of VCs and investors who add value to the business. First, Green suggests that investors should be a sounding board. Second, Frankel argues that investors should bring experience that helps the startup avoid time consuming pitfalls. Third, Cline argues that valuable investors both act as a conscience and help connect the startup to customers. Finally, Green suggests that entrepreneurs should do reference checks on their investors to ensure they make the right partnerships.