Legal Advice

Term Sheet: 7 Terms Every Entrepreneur Should Know

If you are looking to raise a significant investment, the term sheet is the most important document you will need in order to complete your deal. The term sheet gives investors the exact information they would want in a legal agreement. It also helps them evaluate what they are getting into before investing. This article discusses what a term sheet is, how to put one together, and the critical points one should include.

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Introduction to Term Sheet

A term sheet is a short-term contract that outlines the terms of an investment. It is typically signed by both parties to explain the basic terms of what they are agreeing to. The term sheet will list out the amount, price, and other information about an investment before it can be finalized.

Key Points in a Term Sheet

A term sheet is an agreement between two parties outlining a potential deal’s terms. It can include terms such as total investment, milestones, and due dates. In general, it’s a document that forms the starting point for negotiations.

Identity Information

A Terms Sheet is a document that outlines what information is needed from you to be able to do business with your company. It should include your name, address, email address, phone number, and date of the last contact. If you have a website address or social media accounts, those should also be listed on the sheet for quick reference.

Valuation Information

A Valuation is a document that sets out the basic terms of a stock sale, such as the price and number of shares to be sold. A Valuation will usually include a cap on the maximum amount that can be raised in the stock sale. The term sheet also typically consists of an agreed-upon price for the sales.



Terms sheets are meant to be filled out after all parties involved have agreed on a contract, and it must outline how much equity each party has and the percentages of the profits from the project. The percentages are generally determined based on how much money each side put into the project, with more investment having more power in negotiations.

Terms And Conditions

A term sheet is a document used to describe the terms of an agreement between two parties. It is considered to be a preliminary contract that outlines the basic terms and conditions of a potential investment, business or sale deal. They are typically used in North America and Europe before both parties have signed an official contract.

Payment Scheme

Term sheets are used in most of the deals that take place in the business world. They allow two parties to reach an agreement without any legal issues. The critical points in a sheet are usually how much money is owed, how long the agreement will last when payments are made, and what happens if one party wants to back out of the deal.

Financial Information

A term sheet is a document that outlines the key details of a business deal. It includes information such as financial projections, the stage of the project, and executive compensation.

Tax Considerations

The term sheet is a non-binding agreement that outlines the key points of a firm’s proposal for entering into a business venture with another company. It typically includes the name of the company, the amount of capital being requested by them, and an indication of the duration and terms of the agreement.

Intellectual Property

It is a written contract between a company and an investor that details the legal rights of the parties involved. Many key points are included in a term sheet to ensure investors have all the information they need. The most important point is that the company will always own the intellectual property for its idea, concept, or product.


A term sheet is a formal document where a company and an investor agree to a deal. This type of contract typically outlines what the business will provide and gives the investors some guarantees. It is meant to be a preliminary agreement for both parties and can be changed later.

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