Term sheet & SAFE/ASA decoder
Don't sign blind or pay £500–£2k for a lawyer to sanity-check it first. Paste your term sheet — we explain every clause in plain English and flag anything off-market for the UK, including the ASA terms that affect your SEIS/EIS.
Private — we don't store the text of your term sheet, only the analysis. This is information, not legal or tax advice.
UK seed term sheet norms: what's market vs off-market
| Term | Market standard | Off-market |
|---|---|---|
| Liquidation preference | 1x non-participating | Participating, or greater than 1x |
| Anti-dilution | Broad-based weighted average | Full ratchet |
| Option pool | ~10–15% | Large pool created pre-money (dilutes founders only) |
| Board | Founder-controlled or balanced | Investor majority at seed |
| Dilution | ~20% (15–25%) | Materially above 25% |
| Founder vesting | 4 years, 1-year cliff | No acceleration on exit |
Benchmarks reflect UK pre-seed/seed market practice (2024–2025). Information only, not legal advice.
Questions founders ask
What does the term sheet decoder do?+
Paste the text of a term sheet, SAFE or ASA and it identifies the instrument, explains every material clause in plain English, scores how founder-friendly it is, and flags any terms that are off-market for UK pre-seed and seed deals — with specific questions to take back to your investor.
What's the difference between a SAFE and an ASA in the UK?+
A SAFE is a US instrument. In the UK the equivalent is an Advance Subscription Agreement (ASA), which is structured to be compatible with SEIS/EIS. A US-style SAFE usually does not qualify for SEIS/EIS, so UK founders typically use an ASA instead.
Which ASA terms can break my SEIS/EIS?+
For HMRC advance assurance, an ASA must have a longstop date no more than 6 months away, must be non-interest-bearing, non-refundable and non-assignable, and must not give the investor downside/capital protection. A discount or valuation cap is allowed, but aggressive investor protection can fail the risk-to-capital condition. The decoder flags these automatically.
What counts as an off-market term at seed?+
In the UK at seed, off-market terms include a participating or greater-than-1x liquidation preference, full-ratchet anti-dilution, investor control of the board, an oversized option pool placed pre-money, and broad investor veto rights over day-to-day decisions.
Is this legal advice?+
No. It's an information tool to help you understand your term sheet and negotiate from a more informed position. For a binding view, have a startup lawyer review the actual document.