A Term Sheet is a nonbinding document, drafted by the investor (usually along with a legal team), that outlines the terms and conditions of an investment offering. If the investor decides to proceed with the opportunity, the Term Sheet will be used as a template to outline the legal standing of the new shareholder in the company. Although Term Sheets are important documents, often not enough attention is paid to them by founders. Therefore, it is essential to understand and evaluate Term Sheets in order to avoid potential disasters that could shake the foundation of a company.

For further information (the what, why, and who) about Term Sheets - check out the following resources:

Term Sheet Examples

• A Plain English Term Sheet via Business Insider
• Term Sheet Explained in English
• Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist 

Who uses Term Sheets

Online platforms are helping to simplify the Term Sheet process through automation:

• Angel or Seed Investing: Angel Term Sheet For Startups
• Angel Resource Center: Term Sheets
• Seedrs Standardized Term Sheet Template

Why are Term Sheets important

• The Three Terms You Must Have in a Venture Investment
• 8 Important Term Sheet Items to Evaluate Before Investing in a Startup
• The Most Important Points in a VC Term Sheet

Free Sample Term Sheets

• Y Combinator Docs, SAFE and Series AA
• TechStars Docs
• Entrepreneurship.org Seed
• Entrepreneurship.org Series A

Resources

Legal teams specializing in equity funding portals

Laws governing equity funding platforms

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