Technology Due Diligence Back to glossary
Term Sheet
A term sheet is a non-binding document that summarizes the main proposed terms of an investment (valuation, amount, governance, preferential rights), before the final legal documents are drafted.
Why it matters
It sets the negotiation framework before in-depth due diligence begins, and serves as a reference to check that the final legal documents honor the initial agreement.
Concrete example
A startup signs a term sheet setting its valuation before the fund carries out its full technology and financial due diligence.
Related notions
ValuationInvestment negotiationPreferential rights
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