My venture is in a niche but lucrative space. After partnering with a F500, I got in touch with a billionaire who knows the space well and whose company's alesforce could be a powerful tool for us. I asked him to consider 1. Letting me leverage his salesforce; 2. A strategic investment; 3. A Board seat. He said he's open to all 3.
I had a good meeting today with his company's innovation arm about leveraging the salesforce. I'm going to email the billionaire to thank him, and will remind him of my other two requests. Would I be better attaching a Term Sheet with a line about the Board Seat, or an offer for a Board Seat with a line about the terms of the raise?
Short answer: Yes, you should protect yourself. But be careful not to blow the deal.
One thing that i learned is that a good mentor can help you very long distances. If he is truthful don't miss the opportunity, stick on him like glue and delivery the most amount of disproportional value that you can.
You need to be humble to know that he is in a higher position than you right now and he can help you get where he is today. Don't let the short sight of a possible lucrative partnership get in the way of the long game. This should be only the first business you do with him. Think about the long game. Having a guy like that in your close friend circle is a lot more valuable than a single deal.
You should ask for personal mentorship, not trying to leverage him now. The 3 things you asked will help you now, but make him think that you want to suck everything that you can from him now. These kind of people are masters knowing when people want to take advantage of them. Again, think about future deals. A mentor will help you with all this and a lot more.
That being said, you never know what the other person is thinking, so yes, do the term sheet with enough to protect yourself if he is a shark, but try not to be too aggressive and possible blow the deal, again, be humble. Maybe be open to lose in the short time to delivery the disproportional value that will allow you to follow this guy closely.