Term Sheet is a nonbinding agreement, mostly associated with start-ups, which includes the basic terms and conditions under which an investment will be executed. Entrepreneurs find this document as being crucial for attracting investors, such as venture capitalists (VC) with capital to fund enterprises. The most common items spelt out in the term sheet include the company valuation, investment amount, percentage stake, voting rights, liquidation preference, anti-dilutive provisions, and investor commitment.
