Very simple. Very clean. Kudos for having the right spirit of honesty and transparency. VCs have lately taken to bearing their own attorneys' fees on occasion b

Very simple. Very clean. Kudos for having the right spirit of honesty and transparency. VCs have lately taken to bearing their own attorneys' fees on occasion but I have rarely seen a significant VC deal in which the option pool is not brought in as a back-door way of lowering valuation for the founders. Removing that bit of legerdemain from the valuation equation is really quite stunning. Of course, the question is whether this will catch on and stick, even during bad times. When markets are sunny for investors, it is not too hard to bend for the founder concerns. When things are tight, though, the pattern has always been one of merciless slaughter of the founder interest, as evidenced by any down round within memory. So too, in bad times such as the dot-bust period, atrocities like participating preferred and multiple-x liquidation preferences frequently reared their heads and would, I think do so again in any new time of debacle. While individual investors such as Mr. Altman may refrain from this sort of thing, I wonder whether such moderation would ever become the norm. I would tend to doubt it. I also think that even this particular term sheet, though undoubtedly fair to founders in its overall sweep, would need to be adapted to avoid unfairness as it is applied to various cases. If a founder has built large value by the time of Series A, it is very non-standard to require that founder to put the entirety of his stake at risk of forfeiture all over again as a condition to getting funded. That, I assume, would be an obvious point of negotiation and one on which any investor would very likely yield when pressed. These are mere quibbles, though. It is really the spirit of the thing that counts and not the legalese as such. Just as the best contract in the world will not really protect you if you happen to be dealing with a scoundrel, so too the flimsiest of contracts will likely not cause you too much trouble if you are dealing with someone of honesty and integrity. This term sheet reflects the right values that an investor should bring to a deal and, if you get that as a founder, you are 99% of the way there as long as your business interests can match. In the end, that is what counts most of all.