A better prompt for reading your term sheet
The term sheet decoder generates a structured AI prompt that produces a clause-by-clause walkthrough you can actually use.
The most common AI use case for a founder reading a term sheet is pasting it into ChatGPT with a vague prompt like "explain this." The output is usually generic, sometimes wrong, and never structured the way a founder actually needs.
The term sheet decoder on this site does not analyze the term sheet itself. It builds the prompt for you. Pick your round stage (pre-seed through Series C+) and whose perspective you want the analysis to take (founder, investor, company). Click generate. Copy the prompt. Paste it into Claude, ChatGPT, Gemini, or Perplexity, followed by your term sheet text.
Why this works better
The prompt encodes the practice-specific constraints that produce useful output: clause-by-clause structure, plain English mandate, perspective specificity, flagging of unusual terms relative to the round stage, explicit acknowledgment when language is incomplete. Without those guardrails the AI tools default to flowery generality.
You also get step-by-step usage instructions for running the prompt in whichever tool you prefer. Each tool has slightly different attachment mechanics for documents; the instructions cover the common patterns.
What this does not replace
Reading a term sheet with an AI tool is a starting point. The conversation with counsel that follows is where the real value lives, because the question that matters is not "what does this clause do" but "how does this clause interact with my situation, my company stage, and my fund relationships." That question requires context the AI does not have.
The decoder closes the educational gap so you can have a more informed conversation with counsel. It does not replace the conversation.
Walter Allison is a corporate attorney in Denver. He writes here about M&A, private equity, and venture capital structure.
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