Topic map / Capital choice and fundraising terms
Five stages. Interest is not cash you can spend, and a signature is not the absence of a legal duty.
Y Combinator’s Handshake Deal Protocol says a handshake is a verbal commitment, and the transaction is when documents are signed and money changes hands. It also says an investor can say no in a way that sounds like yes, and can take a free option. It is a voluntary YC convention. It is not a statement of the contract law that applies to you. The page was checked on 14 October 2026.
The tracker on the term-sheet guide asks, at each stage: what precisely has been offered, by whom, and on which conditions; which provisions bind and which investment terms remain conditional; what has actually been signed and which closing conditions survive; whether the payment has cleared in the correct company account; and whether restrictions, reserves, refunds, or linked obligations affect spending. A signed document is not runway. An empty bank account is not proof that nothing is legally owed.
Question. How do you keep a funding-status ledger without calling conditional interest committed capital?
I have already signed, paid or lost access if the commitment is no longer only a plan.
Handshake Deal Protocol · Y Combinator
A handshake is a verbal commitment. The transaction is when documents are signed and money changes hands. An investor can say no in a way that sounds like yes, and can take a free option.
Negotiating term sheets: focus on what’s important · Cooley GO, Matthew Bartus
A law firm’s overview of valuation and the option pool, liquidation preferences, the board, protective provisions, and exclusivity. It is a US-oriented practitioner note, not a UAE opinion.