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Entrepreneurship & Startups vocabulary · Fundraising & Investors

Term sheet

Meaning in entrepreneurship & startups, with examples

/ˈtɜːrm ʃiːt/nounCommon term

In entrepreneurship & startups, term sheet means: A short document that lists the main terms of a proposed investment, such as the amount, valuation and investor rights, before the final legal contracts are written.

In Turkish: yatırım şartları belgesi, ön şartlar belgesi, term sheet

How it is used

Getting a term sheet is a big moment in fundraising. Investors issue or send a term sheet; founders receive, negotiate, compare and sign it. Most parts are not legally binding, but confidentiality and exclusivity (no-shop) clauses usually are.

Example sentences

  1. We got our first term sheet yesterday, but the liquidation preference is too aggressive.

  2. Don't sign the term sheet before your lawyer has read every clause.

Common collocations

  • issue a term sheet
  • sign a term sheet
  • negotiate the term sheet
  • non-binding term sheet
  • due diligenceA careful check that investors or buyers do before a deal, reviewing a company's finances, contracts, legal status, technology and team to find any risks.
  • valuationThe estimated value of a company, agreed between founders and investors in a funding round, which decides how much ownership investors get for their money.
  • liquidation preferenceA term that gives investors the right to get their money back, or a multiple of it, before other shareholders when the company is sold or closed.
  • lead investorThe investor who puts the largest amount into a funding round, sets the main terms and often encourages other investors to join.
  • shareholders' agreementA contract between the owners of a company that sets out their rights and duties, such as voting, selling shares, board seats and investor protections.

More terms: Fundraising & Investors

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