Garlic Fries and Term Sheets
This last Monday, at the Giants game I tried garlic fries for the first time in my life. The first fry I had tasted truly amazing, every taste bud watered as I put in the next fry into my mouth. My initial reaction to this deep fried garlicky goodness was where have these wonderful fries been my whole life and how come I have never thought to combine these two flavors? However, I as I stuffed my face full of garlic fries I quickly realized that my stomach could not handle much more of this near lethal concoction of garlic and fires.
On Thursday, Phil Black, a founding partner at True, spoke to us about term sheets. I knew a little bit about term sheets prior to this, but my knowledge was very limited. During the course of the week, True had given us a case study, which included a sample term sheet. The objective of the exercise was to review and form an opinion in regards to whether the terms were entrepreneur friendly or not. Initially, as I studied the case I thought that the terms seemed fair given the fact that the investors were offering the entrepreneur more money than he had hoped to raise. However, as I became more familiar with the term sheet and during the course of our discussion, I became aware of that fact that the terms in this case, where not particularly friendly to the entrepreneur.
Now you may be scratching your head and saying what do garlic fries and term sheets have in common? Well actually quite a bit, both in the beginning may appear to be highly appealing. However, it is upon further digestion of both the fries and the term sheets, that you may begin to question your appetite for either. I believe the take-away from this analogy is that it is easy to be fooled by first exposures to term sheets or garlic fries. However, if your homework is done properly it may turn out that garlic fries are the best park food for you (i.e.,the terms of the deal may in actuality be fair).
Quote of the week:
“An entrepreneur tends to bite off a little more than he can chew hoping he’ll quickly learn how to chew it.
- Roy Ash, co-founder of Litton Industries