Most founders treat the term sheet as the moment the round gets decided. By the time it lands in your inbox, the valuation and the allocation are usually settled. In a spreadsheet. Two or three weeks earlier.

Peter Möllmann was recently a guest on my DEALMACHER podcast. He is a partner at PXR and negotiates the largest growth rounds in DACH – a 500 million dollar Series C at Stark, 410 million dollars at Vay, 240 million euros at Amboss – and he also sits on the other side of the table for funds like Battery Ventures, Creandum and Union Square Ventures.

The part of that work he enjoys most has almost nothing to do with law. It is the modelling that happens before anyone drafts a document.

Here is what that means in practice.

Build the full cap table for the round before the term sheet exists: One sheet, every moving part in it. How much you actually want to raise. How much each interested lead wants to write.

Which existing investors will exercise their pro rata. Whether early angels get bought out. Whether you take a secondary, and how large.

Then you model the scenarios: this investor as lead instead of that one, 30 million instead of 40, a larger secondary against a smaller primary. You are looking for the version of the round you actually want to live in.

That sheet is what you align with your investors – valuation and structure together, before the term sheet is written. Peter’s point is that the commercial core of a round is almost always settled this way.

The partner needs a soft okay from his investment committee before he issues anything, and that soft okay rests on a number and a structure you agreed on beforehand. Which is why the valuation is rarely the fight inside the term sheet. It is the reason the term sheet looks the way it does when it arrives.

The secondary is one of the levers in that sheet, modelled alongside round size and valuation. By the time the term sheet arrives, it is written into the agreed cap table. Nobody negotiates it there, because the conversation already happened.

Oversubscription is the easiest place to put a secondary

If two leads both want to write 20 million and you only want 30, the secondary absorbs capital you cannot otherwise take. You clean up the cap table, buy out the pre-seed angels, and take a small amount off the table yourself.

The excess demand gives the conversation an obvious shape.

Without that excess, the conversation still works – it just runs on your argument instead of on the arithmetic. Peter has never seen a deal fall apart because a founder asked for a secondary. What to expect is a reaction that is personal rather than economic.

A partner who has built a strong portfolio but has not yet returned a single euro to his LPs will be more sensitive about you taking money out than one who has. Peter can name which funds react allergically to the word. And the usual heuristic fails here – American investors, generally the more relaxed party on terms, tend to be more reserved on secondaries.

The numbers, so you calibrate before you ask

In a Series A, a six-figure secondary is workable. Seven figures triggers real discussion and depends on how oversubscribed you are.

From the Series B onward, seven figures is common. If you are barely closing the round, the honest answer is that you take nothing.

The argument for doing it at all is risk allocation, not lifestyle. A founder eight years into a venture-backed company holds one illiquid asset, an outsized personal risk profile, and a set of peers who made partner somewhere and draw a very comfortable salary.

Take a small amount off the table and that founder can put the foot down with the rest. Leave everything in, and at some point decisions start getting made for personal security rather than for the company. A small secondary buys alignment.

One more thing belongs in the model, and it is structural rather than financial

In a growth round, ownership and risk stop correlating. Your growth investor pays the highest price, carries the highest risk, and ends up with three or four percent – while the seed investor sits de-risked at ten.

Two risk profiles, two time horizons, one cap table. Every hard negotiation that follows – board seats, drag-along, exit rights, downside protection – is downstream of that asymmetry.

Knowing it while you are still allocating the round tells you which investor will push for what, and lets you design around it instead of reacting to it.

What is left for the term sheet is governance and legal structure: board composition, reserved matters, vesting, exit rights. Those are real negotiations and they deserve a full markup, all of it at once.

But the round itself was designed weeks earlier, with people who already knew what you wanted.

Founders who skip the modelling end up negotiating their own liquidity as a concession. Founders who run it arrive with a structure and a rationale, and the secondary is simply a line in a cap table that was there from the start.

Peter and I went through all of it in the full episode – board composition, venture debt, revesting, employee equity, term sheet negotiation and due diligence – at www.id.vc/dealmacher-podcast.