TLDR:
Market terms refer to the standard contractual terms and conditions commonly accepted in a particular industry or transaction type at a given time, serving as a baseline for negotiations.
Why Market Terms Matter in Negotiations
Understanding ‘market’ for any given term in a startup financing or commercial agreement requires ongoing research since what’s standard changes with market conditions. During bull markets, founder-friendly terms become standard; during contractions, investors push for more protective provisions. Resources like the NVCA model term sheets, Fenwick & West venture surveys, and Cooley’s private company board index provide data on what’s actually being negotiated in current markets, giving founders leverage to push back on terms presented as ‘standard’ that may actually be aggressive.