Today, Naval Ravikant and I are launching Venture Hacks, an entrepreneur’s guide to hacking Venture Capital. Naval calls it a “‘tell all’ site that helps entrepreneurs get on an even footing with their better-informed counterparts when negotiating an investment.”

Our first series of articles, Term Sheet Hacks, describes how to negotiate a great Series A investment. I hope you find it useful. Here are excerpts from our first three articles.

From Term Sheet Hacks: Get a Great Deal:

Many of the successful companies that we all read about in the news didn’t negotiate good deals simply because they didn’t get good advice. Consider Jim Clark’s (founder of SGI and Netscape) account in The New New Thing:

“At [SGI] board meetings… Jim’s face would get red and he’d start shouting that [an investor and board member] had cheated him and his engineers.”

Or read Sabeer Bhatia’s (founder of Hotmail) interview in Founders at Work:

“Any time we would talk to another VC, [our investors] would talk him out of it: ‘This is not a good company’… So we were really stuck with [our existing investors] for the next round.”

Or ask a friend who has taken money from investors.

Whether these stories are true is irrelevant. Like any negotiator, your prospective investors are not in the business of giving you a good deal. They are in the business of making money for themselves and their investors (their limited partners).

From Create a board that reflects the ownership of the company:

The form of government in a company is dictatorship. The board represents the owners of the company and selects the dictator (CEO). The board then works to ensure the dictator is optimally benevolent towards the owners. Naturally, bad dictators get beheaded… If the board represents the owners of the company, its composition should reflect the ownership of the company. Truly competitive and transparent markets, such as the public stock markets, have already reached this conclusion.

After the Series A investment has closed, the common stockholders are probably going to own most of the company. The common stockholders should therefore elect most of the board seats.

From Make a new board seat for a new CEO:

Whether you negotiate a proportional or investor-leaning board, your term sheet will probably state that the CEO of the company must fill one of the common board seats. This may seem reasonable. One of the founders is probably the CEO and you were going to elect him to the board anyway.

Don’t accept this term. The investors are looking several moves ahead of you.

If you accept this term and hire a new CEO, he will take one of the common seats. The common shareholders will not have the right to elect that seat. If the new CEO turns out to be aligned with the investors, the new coalition of CEO + investors will control the board of directors.

Update: Coverage at Venture Beat, Brad Feld, Bart Decrem…