Term sheet clause 21 of 25 · Founders and deal terms
Redemption rights in a term sheet
In plain English: Investors can force the company to buy back shares after some years. Typical: Rare in many venture markets.
Founder-friendly
Absent.
Investor-friendly
Present.
What to watch for
Red flag
Present.
How to model it
This clause doesn't change the maths of your round, but it changes how you run the company. Discuss it with your lawyer and keep it in mind when you compare offers.
Not legal advice. Norms vary by country and market cycle. Have a startup lawyer review your term sheet before you sign.