What is exclusivity in a term sheet?

Exclusivity prevents founders from negotiating with other investors during an agreed period (e.g. 30–60 days). It is binding and a breach may give rise to a claim for damages.

How detailed should a term sheet be?

A term sheet should be concise (2–5 pages) and capture the key economic and governance terms. Legal detail is the subject of the final investment agreement.

How long does it take to negotiate a term sheet?

Typically 1–4 weeks from the first meeting to the term sheet signing. It depends on the complexity of the terms and the number of stakeholders (co-founders, existing investors).

What is a cap table and why is it important for a term sheet?

A cap table (capitalisation table) shows the ownership structure of the company before and after the investment. It is essential for calculating anti-dilution clauses, pro-rata rights and liquidation preferences.

Corporate

Term sheet

Term sheet — the foundation of an investment round

A non-binding document with all the key conditions.

Start free Features

GDPR compliant · EU-hosted

A term sheet shortens due diligence time by 25 % thanks to clear terms

78 % of investment rounds begin with a formal term sheet

Founders with a term sheet close a round 3 weeks faster

A term sheet covers valuation, investment amount, share types, anti-dilution, investor rights, board composition and exit. AI generates it quickly in language that non-lawyers can understand.

Legal context

A term sheet is generally a non-binding document. Only explicitly labelled clauses (exclusivity, confidentiality, cost reimbursement) are binding. It is governed by general contract law principles.

General contract law — mostly non-binding; only explicitly labelled clauses (confidentiality, exclusivity) are binding

Legal basis & glossary

When to use a Term sheet

Before starting legal due diligence in an investment process
To confirm investor interest before preparing the final agreement
When negotiating key terms between founders and investors
As the basis for M&A negotiations

What you get

Valuation and investment amount
Share types and rights
Board and governance
Exclusivity and expiry

How it works

From idea to signature

Valuation and investment amount

Share types and rights

Board and governance

FAQ

Frequently asked questions about Term sheet

Most of the term sheet is non-binding — it expresses intent, not obligation. Only clauses explicitly marked as binding (typically exclusivity and confidentiality) are enforceable.