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
Who uses Term Sheets
Online platforms are helping to simplify the Term Sheet process through automation:
Why are Term Sheets important
Free Sample Term Sheets
Resources
Legal teams specializing in equity funding portals
Laws governing equity funding platforms
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