from::: http://www.gabrielweinberg.com/blog/...rm-sheets.html

I think every startup entrepreneur (and angel investor) should have a good understanding of financing term sheets. Yes, even bootstrappers. I haven't raised any money for my companies that required a term sheet (just friends & family money in my first company), and yet I still think it is important for a number of reasons.

First, most companies will raise money at some point, and you don't want to be learning everything when you need to raise money because it will be distracting and you'll make mistakes that in hindsight seem stupid. Second, you never know exactly when you're going to be in a financing situation. Third, a lot of the same principles carry over into M&A term sheets, and even if you don't raise money I hope you may be involved in an acquisition at some point. And perhaps most importantly, fourth, it doesn't take very long.

Full article at Gabriel Weinberg's Blog