Term sheet
A term sheet is a mostly non-binding document that outlines the key terms of a proposed investment, such as valuation, amount, and investor rights, before the final legal agreements are drawn up.
A term sheet is the starting point for a funding deal. It summarizes the headline economics and control terms an investor is proposing: the amount, the valuation (pre- and post-money), the type of security, board composition, liquidation preferences, and protective provisions. Most of a term sheet is non-binding, with exceptions like confidentiality and exclusivity, but it sets the framework the binding documents will follow.
Once a term sheet is signed, the round moves into due diligence and final legal paperwork before the money actually changes hands and the round is announced.
Term sheets themselves are usually private, so they rarely appear as public signals. The announced round that follows is what shows up downstream, which is what Datahyena captures.
Term sheets are private, but the funding round that results from one appears in the funding-events feed once it is publicly announced, with amount, investors, round, and the sources that reported it, from GET /v1/funding-events.
Common questions
More on term sheet.
Is a term sheet legally binding?
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