Negotiating exit strategy in term sheets

Liquidity event is usually tightly defined in legalities fine print (most likely definitions), either trade sale, IPO or in rare situation management buyout. The key clauses to look at are liquity preferences, how preferred stock gets converted to common, and treatment of options (eg accuhire outcome). Best you consult a securities lawyer if you are uncertain becuase the term sheet is the new employment contract. I believe TheFunded did a blog series analysing term sheets which you can google.