From Pitch Deck to Term Sheet: What Really Happens

From Pitch Deck to Term Sheet: What Really Happens

You crushed the pitch. The VC smiled. They nodded.

Then came the words:

“Let’s stay in touch — this is interesting.”

What now?

Here’s what actually happens between showing your pitch deck and landing a term sheet — and what you need to be ready for.

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1. Initial Pitch — “The Hook”

You’re typically given 15–30 minutes. It’s not about full diligence — it’s about sparking interest.

What they’re evaluating:

• Team credibility

• Market size

• Clear problem and solution

• Why now

• Your storytelling ability

✅ Your job: Make them want to learn more.

💡 Tip: The first pitch rarely leads to a term sheet. It’s a conversation starter, not a close.

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2. Partner Sharing — “Internal Sell”

If one partner at a VC firm is interested, they’ll bring your deck to the Monday partner meeting.

They’ll have to:

• Retell your story (so make it easy to retell!)

• Answer basic diligence questions

• Justify why it’s worth deeper time

📝 Make sure your deck is standalone and tells a tight narrative.

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3. Follow-Up Call — “Let’s Dig Deeper”

You’ll get a second meeting — often with more partners or senior investors.

Now they care about:

• Metrics and traction (MRR, CAC/LTV, churn, engagement)

• Go-to-market strategy

• Team background

• TAM vs wedge entry point

They’ll also start testing your answers for consistency.

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4. Light Diligence — “Prove It”

Before a term sheet, most investors do soft diligence:

• Review your product (or demo)

• Reference calls to customers

• Financial model check

• Review of your cap table and incorporation docs

📂 This is when your data room becomes important (see Article #23).

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5. Internal Partner Vote

If you pass early diligence, the firm holds a formal partner meeting vote.

What matters now:

• One partner strongly advocating

• No major red flags from diligence

• Fit with fund’s thesis and check size

If you’re a good fit but early, you may go on their watch list instead of getting a term sheet.

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6. Term Sheet Prep — “Final Checks”

Before they send a term sheet, you may:

• Meet a GP (General Partner)

• Have one last “culture fit” call

• Get asked for final clarifications (on use of funds, hiring plans, IP)

⏳ This stage can be quick (24–48 hours) or drag out over weeks.

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7. Term Sheet Issued — “The Offer”

You get the PDF. Finally.

It includes:

• Valuation (pre- or post-money)

• Investment amount

• Option pool increase

• Board seat terms

• Liquidation preferences

• Voting rights

📌 Don’t rush to sign. You can negotiate terms — and often should.

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8. Other Investors React

Once a lead VC issues a term sheet:

• Angels or smaller funds often jump in (“Oh, you’re leading? Count us in.”)

• Other firms you’ve spoken with may accelerate or pull back

Use this momentum to:

• Fill the round

• Create optionality

• Increase leverage (for better terms)

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9. Legal Diligence + Close

Now it gets legal:

• Review of incorporation docs

• Final cap table checks

• IP assignment verification

• Employee equity review

VCs’ lawyers draft final investment docs (SPA, voting agreements, etc.).

✅ Best case: Close in 2–4 weeks.
⏳ Worst case: Legal back-and-forth drags for months.

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Real Timeline Breakdown

⏱️ Total: 6–12 weeks from pitch to money-in-bank (on average)

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Tips to Speed Things Up

• Keep your data room updated and ready early

• Have clean cap table / corporate docs

• Stay proactive — don’t “wait for updates”

• Maintain multiple investor convos to create urgency

• Clarify your ideal timeline

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Common Mistakes That Kill Momentum

❌ Overselling or stretching numbers
❌ Poor follow-up after pitches
❌ Slow delivery of requested documents
❌ Surprising cap table issues
❌ Unclear use of funds

Avoid these, and your odds of reaching the term sheet stage go way up.