Decoding the term sheet

<i>“Major investors will have the right to participate on a pro rata basis in subsequent issuances of equity securities<p>Explanation:<p>Allows current investors to retain their current ownership percentage in future financing rounds.”</i><p>Is this right? My understanding was that pro-rata = if an investor owns (say) 20% of a company, then they get to participate with up to 20% of the total of any subsequent financing. This may or may not maintain them at their original 20%.

Not sure if quoting The Social Network and showing screens from it helps your credibility.

The other day I was at a presentation on pitching investors and the presenter, a veteran entrepreneur and investor, recommended having your own set of term sheets ahead of time to present to investors. Is this a good idea? At least for pre-VC investment, which was what this presentation was primarily about.

Hey - made this post to explain the term sheet. Would love any feedback.

thx Michael