Craft Ventures vs Capitaly.vc: How David Sacks’s Term Sheet Philosophy Compares to Founder-Friendly Alternatives

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When founders ask me about the “David Sacks term sheet,” they’re really asking how Craft Ventures’ style stacks up against a faster, more founder-friendly Capitaly.vc alternative.

It’s a smart question because the wrong venture terms can slow your company, cap your upside, or lock your board before you’ve found product-market fit.

In this guide, I break down what Sacks’s philosophy means in practice, how Craft Ventures typically approaches early rounds, and how that compares to a founder-friendly VC model that cuts friction and preserves control.

You’ll get practical negotiation tactics, clear definitions, and a checklist you can use before you sign anything.

I’ll keep it direct, no fluff, and grounded in what actually shows up in term sheets.

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1) What does “David Sacks term sheet” really mean today?

When people say “David Sacks term sheet,” they often mean a disciplined, operationally minded approach that rewards capital efficiency, clear milestones, and clean cap tables.

Craft Ventures has a reputation for speed when conviction is high, but also for structure when risk is unclear.

That structure shows up in investor protections, board dynamics, and expectations for burn.

Think “move fast, but don’t blow up.”

Here’s what that usually means for founders:

• Clarity on milestones. You’ll be asked to define what unlocks the next round.
• Preference for clean rounds. Less noise, fewer side letters, tight pro rata.
• Measured control. Reasonable governance, but not a free-for-all.

For more on preparing your company for a disciplined investor, see our blog post: Milestone-Driven Fundraising: How to Raise with Proof, Not Promises.

2) Craft Ventures’ standard terms: what I’ve actually seen

Here’s the gist of what tends to show up in Craft-style term sheets, with the caveat that terms vary by stage, sector, and deal heat.

I’m sharing patterns, not promises.

• Liquidation preference: Often 1x non-participating.
• Pro rata rights: Strong, sometimes with super pro rata if conviction is high.
• Board seat: Likely if leading a priced round.
• Information rights: Standard monthly or quarterly updates with financials.
• Protective provisions: Typical for major transactions and new issuances.

These terms aren’t extreme by venture standards, but they’re not feather-light either.

They’re designed to align execution with outcomes, which is reasonable if you know what you’re signing.

3) SAFE vs priced round: where Sacks lands and why it matters

SAFE vs priced round is the first big fork for early founders.

Sacks has often emphasized focus and efficiency, and a SAFE can be efficient for smaller checks or velocity rounds.

Craft, like many leads, often prefers a priced round when responsibility and governance matter.

Here’s how I choose:

• Use a SAFE when speed > governance and the check size is smaller.
• Use a priced round when the investor is leading, wants a board seat, and will help recruit, hire, or GTM.

If you go SAFE, push for YC Post-Money SAFE with a clean valuation cap and no MFN surprises.

If you go priced, lock 1x non-participating and resist exotic terms.

For more on SAFE mechanics, see our blog post: SAFE vs Priced Round: The Founder’s Decision Framework.

4) Board seats and control: Craft vs founder-friendly alternatives

Board control sets the tone for every strategic decision.

Craft leading a Seed or Series A may request a board seat.

That’s normal, but you should structure it carefully.

• At Seed: Consider 2 founders + 1 investor + 1 independent later.
• At Series A: 2 founders + 1 or 2 investors + 1 independent.

A founder-friendly VC like Capitaly.vc often avoids early board seats or defers to observer rights until later traction.

That lets you move fast without board politics.

For more on board setup, see our blog post: How to Design a Founder-First Board from Day One.

5) Liquidation preferences: 1x non-participating or something else?

This is where founders get burned without realizing it.

Shoot for 1x non-participating.

Avoid participating preferred unless valuation or round size demands a trade-off you truly understand.

If you must accept participating, negotiate a cap on participation.

Craft’s discipline tends to align with 1x non-participating, which is reasonable and founder-friendly.

6) Pro rata and super pro rata: who keeps the option?

Pro rata rights let investors maintain ownership in future rounds.

Super pro rata lets them take more than their share.

Craft may ask for strong pro rata to double down if you hit product-market fit.

Here’s my rule:

• Grant standard pro rata to meaningful early backers.
• Limit super pro rata unless the investor brings repeatable GTM advantage, recruiting, or platform value.

Protect your allocation for strategic new investors at Series A or B.

7) Information rights and transparency: what you sign up for

Information rights aren’t scary if you already run tight reporting.

You’ll likely share monthly metrics, quarterly financials, and annual budgets.

Craft-style terms usually request this, and it creates accountability.

If you’re early, propose lightweight reporting until revenue scales.

For more on investor updates that actually win you follow-on, see our blog post: The Investor Update That Raises Your Next Round.

8) Anti-dilution mechanics: full ratchet vs weighted average

Anti-dilution clauses adjust investor price if a down round happens.

Full ratchet is punitive and resets price to the lowest next-round price.

Weighted average is more balanced and considers round size.

Craft’s approach tends to track market norms with weighted average.

Push for broad-based weighted average and avoid full ratchet unless you’re trading for something big.

9) Option pool shuffle: who pays the true price?

Investors often ask you to expand the option pool pre-money.

That pushes dilution onto you, not the new investor.

Craft will negotiate this like any lead.

Here’s how I handle it:

• Size the pool against a real 18-month hiring plan.
• Calculate the exact headcount and grants, then negotiate to the number.
• Push for post-money expansion if your plan is modest.

Do the math once, and you’ll save millions later.

For deeper tactics, see our blog post: Option Pool Math: Stop Over-Diluting Before You Hire.

10) No-shop and deal speed: do you lose leverage?

A no-shop keeps you from shopping the term sheet for a set period.

It’s standard, but too long kills leverage.

Target 10–15 business days with mutual best efforts to close.

Craft can move quickly when aligned.

Capitaly.vc leans even faster with a workflow built for AI-speed diligence and clean docs.

For tactics to run parallel investor processes, see our blog post: How to Create Investor FOMO Without Burning Bridges.

11) Side letters, MFN, and hidden strings

Side letters can hide rights that create uneven cap tables.

MFN (Most Favored Nation) clauses on SAFEs can let investors opt into better terms later.

Keep the round clean.

Consolidate rights into the main docs where possible.

Craft is generally disciplined here, which is good for you if you value clarity.

12) Milestone tranches: efficient or risky?

Tranching sounds reasonable until a market shifts and you miss due to timing, not execution.

It’s a control mechanism, not a gift.

If tranching comes up, narrow the milestones and define objective metrics.

Ask for operational support to hit them.

Or negotiate a full close with a smaller initial round and a clear bridge plan.

13) Protective provisions: what blocks your roadmap?

Protective provisions give preferred holders vetoes over major actions.

Expect standard asks like new share issuances, acquisitions, or debt.

Trouble starts when provisions cover normal operating moves.

Keep them to big rocks, not everyday decisions.

Craft’s provisions tend to be market.

Still, read every line and map it to your 18-month plan.

14) Secondary sales for founders: how far will Craft go?

Founders sometimes sell a small portion in later rounds for liquidity.

At Seed or early A, it’s rare.

At late A or B with strong traction, a small secondary can be reasonable.

Craft’s position, like many top firms, is traction dependent and aligned to avoiding perverse incentives.

Expect tighter limits early and more flexibility once the engine is working.

15) Valuation discipline vs momentum: Sacks’s approach compared

David Sacks is vocal about discipline, efficiency, and sustainable burn.

That usually means fewer hype rounds at nosebleed prices without proof.

As a founder, that can help you avoid being priced into a corner.

A right-sized round at the right price beats a painful down round 12 months later.

I coach founders to trade some top-end valuation for cleaner terms and a higher chance of follow-on.

For more on valuation trade-offs, see our blog post: Valuation vs Terms: Which Matters More for Your Outcome?.

16) Capital efficiency and burn: what the term sheet rewards

Terms are signals.

Craft’s signaling favors teams that run lean, learn fast, and tell the truth with metrics.

If your burn is high, expect more structure.

If your unit economics are crisp, you earn more flexibility.

Capitaly.vc is similar but pairs that with speed and standardized paperwork to get you back to building.

17) How Capitaly.vc structures founder-friendly deals

Here’s how a Capitaly.vc alternative often differs in practice.

• Speed first. Streamlined AI-driven diligence and templated docs to close fast.
• Clean docs. YC SAFEs or standard NVCA terms with minimal side letters.
• No early board seat by default. Observer rights until scale, then revisit.
• Transparent pro rata. No surprise super pro rata unless strategic.
• 1x non-participating preference. No exotic liquidation mechanics.

This isn’t founder indulgence.

It’s founder enablement.

The goal is to compound learning velocity while protecting your future rounds.

For more on our approach to speed, see our blog post: Raising at the Speed of AI: How to Close in Days, Not Months.

18) Case study: converting a Craft-style term sheet into a Capitaly.vc deal

Here’s a real-world style example based on common patterns.

Names and numbers changed, dynamics intact.

A Seed-stage SaaS company received a priced round term sheet with 1 board seat, 1x non-participating preference, standard information rights, pre-money option pool expansion to 15%, and super pro rata for the lead.

The founders wanted to move faster and preserve flexibility for a momentum Series A.

We re-cut the round as a capped SAFE at a slightly higher implied valuation with no super pro rata, a right-sized 10% option pool based on a written hiring plan, and an observer seat instead of a voting seat until $2M ARR.

Close time dropped from 6 weeks to 12 days.

The company then raised a larger A six months later with clean follow-on and no cap table drama.

For more on turning priced deals into clean SAFEs, see our blog post: From Priced to SAFE: When and How to Simplify Your Round.

19) How to negotiate if Craft is your lead

If Craft is leading, assume you’re negotiating with smart operators who value clarity.

That’s good for you.

Here’s my short playbook:

• Bring a hiring plan. Use it to negotiate the option pool.
• Define milestones. Align them to board reporting, not tranches.
• Ask for observer before board seat if you’re pre-PMF.
• Lock 1x non-participating. No participation unless capped and justified.
• Limit super pro rata. Offer standard pro rata and strategic allocations.
• Cap the no-shop at 10–15 business days. Move fast together.

Respect the process, show the math, and you’ll land a fair deal.

20) The checklist: a founder’s quick screen for venture terms

Use this checklist before you sign any term sheet.

• Round type: SAFE for speed, priced for governance.
• Preference: 1x non-participating.
• Board: Observer until PMF, then 1 seat.
• Pro rata: Standard for insiders, limited super pro rata.
• Option pool: Based on real hiring plan, avoid pre-money bloat.
• Information rights: Standard, with lightweight early reporting.
• Anti-dilution: Broad-based weighted average.
• Protective provisions: Major events only.
• No-shop: 10–15 business days.
• Side letters: Minimize and consolidate.

For a printable version, see our blog post: The Term Sheet Red Flags Checklist.

Bonus: Data room signals that speed up any deal

Whether you go with Craft Ventures or a Capitaly.vc alternative, an AI-ready data room closes time gaps.

I include these in every process:

• One-pager with crisp problem, solution, traction, and ask.
• Metrics snapshot with cohort trends, payback, and pipeline.
• Hiring plan and org map with comp bands and start dates.
• Security and compliance basics with architecture diagram.
• Contracts with top customers and churn logs.

For a full checklist, see our blog post: The AI-Ready Data Room Checklist.

Founder-friendly VC in practice: what changes for you

Let’s ground this in day-to-day impact.

Three things change when your investor is truly founder-friendly.

• Time-to-close drops. You spend less time negotiating and more time selling.
• Control remains with the builders. Governance grows with traction, not before.
• Future rounds get easier. Clean terms attract great downstream partners.

Capitaly.vc’s approach is to make these gains repeatable, not lucky.

That is the ultimate compounding advantage.

Common traps I see in early term sheets

I see founders trip on the same avoidable traps.

• Hidden participation that looks like 1x but participates in small exits.
• Bloated pre-money option pools that steal 3–5% more than needed.
• Super pro rata that chokes new strategic investors later.
• Overreaching protective provisions that slow everyday operations.
• Long no-shops that kill urgency and leverage.

If any of these show up, slow down and renegotiate.

For more pitfalls, see our blog post: Term Sheet Traps: What to Redline Before It’s Too Late.

How to decide between Craft Ventures and a Capitaly.vc alternative

Here’s the meta-decision I coach founders to make.

• Choose Craft if you want a lead with operating depth, structured governance, and conviction to follow on when you execute.
• Choose Capitaly.vc if you want speed, clean documentation, and maximum founder control until you hit clear traction.
• Choose both if you can syndicate smartly and align on a clean cap table.

It’s not either-or if you design the round with intention.

For syndication tactics, see our blog post: How to Syndicate a Round Without Losing Control.

My negotiation script you can copy and paste

Here’s language I’ve used in emails and calls.

Use it verbatim or adapt it.

• “We’re aligned on 1x non-participating and standard information rights.”
• “Given we’re pre-PMF, let’s start with an observer seat and revisit a board seat at $2M ARR or next priced round.”
• “We sized the option pool to 10% based on a written hiring plan and are happy to share the model.”
• “We’ll grant standard pro rata and limit super pro rata to X% for strategic reasons.”
• “We can agree to a 12-business-day no-shop with mutual best efforts to close.”

Short, clear, and grounded in facts wins more than bluster.

Where generative AI changes fundraising terms

AI-native startups move faster and de-risk sooner.

That should result in simpler rounds at earlier stages.

Expect investors to ask deeper questions on data rights, model provenance, and unit economics of inference.

Document these early to avoid extended diligence.

For AI-specific diligence templates, see our blog post: AI Diligence 101: Data Rights, Model Risk, and GTM.

FAQs

What is the typical “David Sacks term sheet” structure?

There’s no single template, but you’ll often see 1x non-participating preference, reasonable governance, standard info rights, and emphasis on execution milestones.

Is a SAFE or priced round better with Craft Ventures?

It depends on stage and whether they’re leading.

For small checks and speed, a SAFE can work.

For lead roles with governance, a priced round is common.

What’s the most founder-friendly liquidation preference?

1x non-participating.

Avoid participating preferred unless capped and well compensated elsewhere.

Should I accept super pro rata rights?

Only if the investor brings exceptional strategic value.

Otherwise, limit to standard pro rata to keep room for future leads.

How big should my option pool be at Seed?

Usually 8–12% based on a real 12–18 month hiring plan.

Do not agree to arbitrary numbers.

How long should a no-shop be?

10–15 business days is market for speed without losing leverage.

What anti-dilution should I accept?

Broad-based weighted average.

Avoid full ratchet except in rare cases with clear upside elsewhere.

Do I need a board at Seed?

Not always.

Consider an observer structure until PMF, then add a seat when it helps.

Can I run a clean SAFE round and still convert to a priced A later?

Yes.

Use YC post-money SAFEs, set a clear cap, and avoid MFN or side letters that complicate conversion.

How does Capitaly.vc compare to Craft Ventures for founders?

Craft offers operating depth and structured governance.

Capitaly.vc optimizes for speed, clean terms, and founder control until traction is undeniable.

Conclusion

The best founders don’t chase the highest valuation or the flashiest brand.

They optimize for clean terms, fast closes, and partners who help them compound.

Craft Ventures, shaped by the David Sacks term sheet philosophy, brings discipline and operating rigor.

A Capitaly.vc alternative brings speed, standardized docs, and founder-first control until the business demands heavier governance.

Choose what aligns with your stage and how you build.

If you want the fastest path to a fair, founder-friendly VC round, your next move is simple.

Subscribe to Capitaly.vc Substack (https://capitaly.substack.com/) to raise capital at the speed of AI.