This template term sheet has been produced for use with simple equity investments in early stage companies. We have included some standard terms that will likely be relevant for most such investments. Terms in square brackets are optional and should be adjusted to suit individual circumstances.
Term sheets are generally not legally binding (save, often, for any provisions relating to confidentiality, fees and exclusivity). They are important to get right, however, as it is normally difficult to negotiate changes to terms agreed at the term sheet stage further.
The key things for both sides to consider are:
- the economic terms (e.g. the share price at which the investors are going to come in at) and
- the control terms (e.g. matters requiring investor consent and board appointments). In our experience entrepreneurs often focus too much on the former at the expense of the latter.
We have also produced a separate guide on things entrepreneurs should think about with their first funding round: https://www.boodlehatfield.com/articles/6-things-to-know-about-your-first-funding-round/
Please do contact a member of the team if you have any queries.
Our market leading experts are on hand to guide you through all stages of the business lifecycle on everything from to establishing to protecting a business.