Question: A VC form is evaluating two term sheets, Term Sheet A ad Term Sheer B, for a $10 million investment in the same startup, BetaCo.

A VC form is evaluating two term sheets, Term Sheet A ad Term Sheer B, for a $10 million investment in the same startup, BetaCo. The two term sheets have several differences. One of these differences is that the two term sheets put different valuations on the startup:

  1. Term Sheet A values BetaCo at a $20 million post-money valuation.
  2. Term Sheet B values BetaCo at a $12 million pre-money valuation.

Consider the following statement: "Term Sheet A is definitely better for the VC form than Term Sheet B because it places a lower valuation on the startup."

Is the statement true or false? Please explain why.

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