Term Sheet

A term sheet is a pre-contractual statement of intent that summarises the key economic and legal points of a planned transaction. It documents the negotiation results before the detailed contracts are drafted and serves as a roadmap for the further contractual structuring. Related terms are the letter of intent (LOI) and the memorandum of understanding (MoU).

Typical points include valuation and purchase price, equity stake, investment amount and central protective rights such as the liquidation preference, anti-dilution protection and vesting arrangements. The term sheet is predominantly non-binding; usually only clauses on confidentiality, exclusivity and cost allocation are binding. In financing rounds such as the Series A, it is the first concrete milestone of the negotiation.

A well-negotiated term sheet saves time and cost later in the process because it clarifies potential points of dispute early. From its key points, the shareholders' agreement and the investment agreement later emerge. We support the negotiation as part of our M&A advisory.