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Term Sheet

This Term Sheet outlines the principal terms and conditions of a proposed investment in a company. It is used to establish a non-binding understanding between the investor and the company before drafting definitive legal agreements.

Updated 17d ago
term sheetinvestmentfinancingequityfundingstartupSME

COMPANY LETTERHEAD

{{company_name}}

{{company_address}}

Phone: {{phone}}

Email: {{email}}

Website: {{website}}

DATE

{{date}}

INVESTOR

{{investor_name}}

{{investor_address}}

COMPANY

{{company_name}}

{{company_address}}

PROPOSED INVESTMENT

**Investment Amount:** {{investment_amount}}

**Type of Security:** {{type_of_security}} (e.g., ordinary shares, preference shares, convertible debt)

**Valuation (Pre-money):** {{pre_money_valuation}}

**Equity Stake:** {{equity_stake}}% of the fully diluted share capital of the Company.

KEY TERMS AND CONDITIONS

**Board Representation:** The Investor shall be entitled to appoint {{number_of_directors}} director(s) to the Company's Board of Directors.

**Information Rights:** The Investor shall receive regular financial and operational reports, including but not limited to, monthly management accounts, quarterly financial statements, and annual audited financial statements.

**Protective Provisions:** Certain key decisions (e.g., sale of the company, material changes to the business plan, creation of new share classes, incurrence of significant debt) shall require the prior written consent of the Investor.

**Liquidation Preference:** In the event of a liquidation, dissolution, or winding up of the Company, the Investor shall be entitled to receive a {{liquidation_preference_multiple}}x liquidation preference over ordinary shareholders.

**Anti-Dilution Provisions:** The Investor's shares shall be protected against dilution in the event of future equity issuances at a lower valuation, subject to customary exceptions.

**Vesting Schedule (for Founder Shares):** Any unvested founder shares shall be subject to a vesting schedule of {{vesting_years}} years with a {{cliff_months}}-month cliff.

CONDITIONS PRECEDENT

The proposed investment is subject to the satisfaction of customary conditions precedent, including but not limited to, satisfactory completion of due diligence, execution of definitive legal agreements, and obtaining all necessary corporate and regulatory approvals.

GOVERNING LAW

This Term Sheet and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with the laws of {{jurisdiction}}.

CONFIDENTIALITY

The terms of this Term Sheet and all information exchanged between the parties in connection with the proposed investment shall be kept strictly confidential, except as required by law.

EXCLUSIVITY (Optional)

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 or negotiations with any other party regarding a competing investment proposal.

SIGNATURE BLOCK

Agreed and Accepted:

For and on behalf of {{company_name}}:

___________________________

Name: {{company_signatory_name}}

Title: {{company_signatory_title}}

For and on behalf of {{investor_name}}:

___________________________

Name: {{investor_signatory_name}}

Title: {{investor_signatory_title}}

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