#267: Term Sheets 101 with Giannuzzi Lewendon

In this episode of the Startup CPG Podcast, host Daniel Scharff sits down with Adam Marsh and Gabrielle McGonagle, partners at Giannuzzi Lewendon, a top-tier CPG law firm, for a deep dive on term sheets and what every founder needs to understand before raising capital. Adam has spent nearly 13 years practicing law focused on the CPG space, while Gabrielle brings over a decade of experience at the firm, including work on major exits like BodyArmor's $8 billion sale. Together, they've guided countless CPG brands through fundraising, from pre-revenue startups to companies doing nine figures in revenue, and are frequent partners of Startup CPG's Founders and Funders events. Daniel, Adam, and Gabrielle break down what a term sheet actually is, why founders should consider proposing their own terms instead of waiting on investors, and the key levers, beyond valuation, that determine how good a deal really is. They cover protective provisions, board control, liquidation preferences, option pools, redemption rights, and more, offering founders a practical framework for knowing what to fight for and what to let go. Listen in as they discuss: What a term sheet actually is, and why founders should consider proposing their own Why negotiating a term sheet properly upfront saves time and money in the long run What investor blocking rights (protective provisions) are, and how far they can extend Why a seemingly small board block can function as a backdoor block on future financing The critical difference between protective provisions held by an investor versus a board director Why budget approval rights should stay at the board level, not the investor level How founders can maintain board control even as the board grows with each funding round The difference between participating and non-participating preferred stock, and why it matters How option pools work, and why founders should push for them to be calculated post-money What redemption rights, pro rata rights, and reporting obligations mean for founders long-term Episode Links: Adam Marsh LinkedIn: www.linkedin.com/in/adam-marsh-847a8571 Gabrielle McGonagle LinkedIn: www.linkedin.com/in/gabrielle-mcgonagle-803b2b21 Giannuzzi Lewendon LinkedIn: www.linkedin.com/company/giannuzzi-lewendon-llp Giannuzzi Lewendon Website: www.gllaw.us Giannuzzi Lewendon Instagram: @giannuzzilewendon Contact Adam directly: [email protected] Contact Gabrielle directly: [email protected] Don't forget to leave a five-star review on Apple Podcasts or Spotify if you enjoyed this episode. For potential sponsorship opportunities or to join the Startup CPG community, visit www.startupcpg.com. Show Links: Transcripts of each episode are available on the Transistor platform that hosts our podcast here (click on the episode and toggle to "Transcript" at the top) Join the Startup CPG Slack community (40K+ members and growing!) Follow @startupcpg Visit host Daniel's LinkedIn: www.linkedin.com/in/danscharff Questions or comments about the episode? Email [email protected] Episode music by Super Fantastics