Term Sheet
An investment Term Sheet acts as a preliminary agreement between startups and investors. It plays a crucial role in streamlining negotiations and laying out the framework for investment transactions—serving as the foundation for deeper legal agreements to follow.
At Classic Trade mark Office, we help startups, founders, and investors prepare well-structured, legally sound Term Sheets that simplify negotiations, minimize risk, and accelerate funding rounds.
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📜 What is a Term Sheet?
A Term Sheet is a non-binding document that outlines the essential terms and conditions of a proposed investment. Though not legally enforceable, it provides a clear snapshot of what both the investor and the business founder expect from the transaction.
Think of it as a blueprint for a formal agreement—setting the stage for legally binding contracts like the Shareholder Agreement or Share Subscription Agreement (SSSHA).
✅ Benefits of a Term Sheet
Despite being non-binding, a Term Sheet offers several strategic advantages:
Clarifies Expectations: Summarizes key terms like valuation, investment amount, and shareholding.
Speeds Up Funding: Helps founders and investors reach alignment early, shortening negotiation time.
Reduces Legal Disputes: Provides a reference point in case of misunderstandings or disagreements.
Saves Time & Resources: Prevents lengthy negotiations over formal contracts by settling core terms first.
Facilitates Fair Negotiations: Encourages transparency and openness from both parties.
📌 Key Elements of a Term Sheet
A professionally crafted Term Sheet usually includes:
Details of All Parties: Names and roles of founders, directors, and investors.
Proposed Investment: Amount of capital to be invested, valuation of the company, and stake offered.
Liquidation Preference: Priority of payment to investors in case the company is liquidated.
Board Composition: Structure, voting rights, and any affirmative rights for the investor.
Anti-Dilution Clause: Protection for investors in case of future down-rounds.
Exit Rights: Methods and timelines for investor exit (IPO, acquisition, buyback, etc.).
Share Transfer Restrictions: Rules governing when and how shares can be sold or transferred.
Non-Binding Clause: Clearly states that the document is a framework, not a final contract.
🧾 How It Works
Mutual Discussions: Founders and investors meet and discuss core deal terms.
Draft the Term Sheet: A preliminary agreement is created outlining those terms.
Review & Negotiate: Both parties may review, suggest changes, and finalize.
Proceed to Legal Agreements: Once agreed, parties move toward binding agreements (like SSSHA).
📌 Pro Tip
Always have a lawyer or legal advisor draft or review your Term Sheet. Even though it’s non-binding, poorly worded clauses can delay or derail your funding process.
🛠️ Our Services Include:
✅ Expert Consultation:
Talk to experienced legal professionals who understand startup funding, investor relations, and corporate compliance.
✅ Custom Drafting:
We create investor-ready Term Sheets tailored to your business stage, industry, and funding goals.
✅ Related Documents:
Need assistance with Shareholders’ Agreements, Employment Contracts, or Cap Table structuring? We’ve got you covered!
🤝 Why Choose Classic Trade Mark Office?
We specialize in helping startups and entrepreneurs with high-quality legal documentation that’s clear, actionable, and investment-friendly. With our experienced team of lawyers and consultants, you’ll always be a step ahead in your investment journey.
📞 Ready to Raise Funds Confidently?
Let us draft your Investment Term Sheet that empowers your fundraising while protecting your interests.
📧 Contact Us: support@classictrademark.in
📞 Toll-Free: 0562-4091576 /9084890415
Classic Trade Mark Office — Legal Drafting Made Simple, Affordable, and Reliable.