Today’s episode is about a startup that got the term sheet… and then lost the deal in due diligence. A B2B SaaS company with strong growth, real customers, and investor interest watches a $2M seed round disappear after investors uncover issues the founders thought were “probably fine.”

We break down what actually happens after a term sheet, how investors think during due diligence, and why information risk can kill a deal faster than weak metrics.

DEAL TERMS REFERENCED:

• Investment: $2M | Pre-money valuation: $8M | Post-money: $10M

• Structure: Priced seed round

• Investor rights: Pro-rata rights, observer participation

• Liquidation preference: 1x non-participating

• Founder vesting: 4 years with 1-year cliff

KEY CONCEPTS EXPLAINED THIS EPISODE:

• Due diligence: The inve ...