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Term Sheet

This Term Sheet outlines the principal terms and conditions under which an investment will be made into a company. It is used to establish a non-binding understanding between the investor and the company before drafting definitive legal agreements.

Updated 15d ago
term sheetequity fundinginvestmentstartupSMESouthern Africafunding

Company Letterhead

{{company_name}}

{{company_address}}

Phone: {{phone}}

Email: {{email}}

Website: {{website}}

Date

{{date}}

Parties

This Term Sheet (the 'Agreement') is made and entered into between:

**{{company_name}}** (Registration Number: {{company_registration_number}}), a company duly incorporated under the laws of {{jurisdiction_of_incorporation}}, with its registered office at {{company_address}} (the 'Company'); and

**{{investor_name}}** (Registration Number: {{investor_registration_number}} or ID Number: {{investor_id_number}}), a {{investor_type}} duly incorporated/residing under the laws of {{investor_jurisdiction}}, with its registered office/address at {{investor_address}} (the 'Investor').

Proposed Investment

**Investment Amount:** The Investor proposes to invest a total of {{investment_amount}} ({{investment_amount_words}}) into the Company.

**Type of Security:** The investment will be in exchange for {{type_of_security}} (e.g., ordinary shares, preference shares, convertible notes) of the Company.

**Valuation:** The pre-money valuation of the Company is agreed at {{pre_money_valuation}} ({{pre_money_valuation_words}}). Post-money valuation will therefore be {{post_money_valuation}}.

**Equity Stake:** Upon completion of the investment, the Investor will hold approximately {{equity_stake_percentage}}% of the fully diluted share capital of the Company.

Use of Proceeds

The Company intends to use the investment proceeds for the following purposes:

- {{use_of_proceeds_1}}

- {{use_of_proceeds_2}}

- {{use_of_proceeds_3}}

Key Conditions Precedent

The proposed investment is subject to, inter alia, the satisfaction of the following conditions:

- Completion of satisfactory legal, financial, and commercial due diligence by the Investor.

- Negotiation and execution of definitive legal documentation (e.g., Shareholders' Agreement, Subscription Agreement).

- Obtaining all necessary regulatory and shareholder approvals.

Representations and Warranties

The Company will provide customary representations and warranties to the Investor regarding its business, assets, liabilities, and legal standing.

Non-Binding Nature

This Term Sheet is intended solely to set forth the principal terms of the proposed investment and is expressly non-binding, except for the clauses specifically stated as binding (e.g., confidentiality, exclusivity, governing law). No legally binding obligations will be created until definitive legal agreements are executed by all parties.

Confidentiality

All information exchanged between the parties in connection with this Term Sheet shall be kept strictly confidential and shall not be disclosed to any third party without the prior written consent of the disclosing party.

Exclusivity

For a period of {{exclusivity_period}} days from the date of this Term Sheet, the Company agrees not to solicit, initiate, or engage in discussions with any other potential investors regarding a similar transaction.

Governing Law and Jurisdiction

This Term Sheet shall be governed by and construed in accordance with the laws of {{governing_law_jurisdiction}}. Any disputes arising out of or in connection with this Term Sheet shall be subject to the exclusive jurisdiction of the courts of {{governing_law_jurisdiction}}.

Signature Block

Agreed and Accepted:

**For {{company_name}}:**

___________________________

Name: {{company_signatory_name}}

Title: {{company_signatory_title}}

Date: {{signature_date}}

**For {{investor_name}}:**

___________________________

Name: {{investor_signatory_name}}

Title: {{investor_signatory_title}}

Date: {{signature_date}}

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