Term Sheet

A non-binding document outlining the key terms of a proposed investment deal.

A term sheet lays out the basic conditions of a funding round or acquisition, valuation, amount raised, ownership stake, and investor rights, before lawyers draft the full binding agreement. It gives both sides a chance to agree on the big picture early, saving time and legal fees if the deal later falls apart over the details.

The startup signed a term sheet with the venture fund, setting the valuation before the full contract was drawn up.