The first step to negotiating a venture capital deal is the Term Sheet.  This is a very important document, setting out the terms under which the parties are going to negotiate in good faith.  While the term sheet is not binding, the terms are not negotiable once the term sheet is signed.  In other words, if you want the money, you do the deal on the terms contained in the term sheet or not at all.

So even though it seems fairly informal -- the fact that it is "not binding" is so very reassuring -- it is critical that you have your attorney review the term sheet before you sign it.  You need to fully understand the conditions under which the investors are offering the funds.  The terms in the term sheet may not be binding, but they're not negotiable either.  It is wise to get an attorney to help you negotiate while there is still an opportunity to do so.