
Startup Term Sheet Templates
What is a Startup Term Sheet?
A Term Sheet is a non-binding agreement setting forth the basic terms and conditions under which an investment will be made. A term sheet serves as a template to develop more detailed legal documents. Once the parties involved reach an agreement on the details laid out in the term sheet, a binding agreement or contract that conforms to the term sheet details is then drawn up.
A Startup Term Sheet is drawn up before the rest of the legal financing documents to state the basics terms and conditions of the forthcoming investment to be made. A Term Sheet is non-binding, and is not a legal promise from the potential investor to invest. It does not guarantee money coming in. It serves more as a template from which more detailed legal documents are developed. Once both investor and founders have reached an agreement on what has been stated in the term sheet, a legally binding contract can be drawn up that conforms to the terms and conditions stated in the term sheet. They usually consist of three parts: funding, corporate governance, and liquidation.
Term Sheet Negotiation
Term Sheets are usually centered around 2 things:
- Control of the company
- What cash is received in the event of an exit
It’s important that as an entrepreneur, you go into a term sheet negotiation as knowledgeable as possible in order to get the best terms possible. Investors are generally going to know their stuff, and will obviously try to come to an agreement that gives them the best possible deal, so you have to know what is going to work best for you too. A lack of knowledge will put you at a real disadvantage, and you are in danger of experiencing information asymmetry.
Key Terms of a Startup Term Sheet Template:
Valuation: This is one of the most important terms in a term sheet. This, alongside how much money is being invested, will determine how much of the company the investor will own. (%) This aspect really affects who owns what, and how much money each shareholder will earn when the business is sold.
Option Pool: The majority of term sheets will impose the creation of an option pool so that shares can be set aside for hires in the future.
Liquidation Preference: This is the name given to downside protection for preferred stock.
Participation Rights: These allow preferred stockholders to get dividends before common stockholders.
Dividends: These are given as a percentage and are used to give back more return that builds up over time to preferred stockholders.
Anti-dilution: This is a feature of preferred stock and basically acts as protection from investors from getting massively diluted in a ‘down round.’
Where can I find Startup Term Sheet Templates?
You can find a number of Startup Term Sheet Templates built by Industry professionals, entrepreneurs, Venture Capital Associations and Investors here on Eloquens below. They are downloadable as PDF or Word Templates and some step by step methodologies to help you better understand a Term Sheet.
For more on Key Terms related to Startup Term Sheets see:
->Term Sheets Guide by CapShare
->For more on the Anatomy of a Term sheet
->For a deeper understanding How to Fully Understand a VC Term Sheet
Most popular Templates
- Case Study and Guidance concerning Friends & Family investments.264Discussadd_shopping_cartfree
by Naco Canada
Term Sheet Series A Template
Guidance for founders negotiating Series A funding.4,972Discussadd_shopping_cartfreeby Serious Funding
VC Venture Capital Term Sheet Template - NVCA Model
A Series A Preferred Stock VC Term Sheet Template3,937Discussadd_shopping_cartfreeby NVCA
Explanatory Brochure on the Anatomy of a Term Sheet
Explanatory brochure designed to help entrepreneurs understand and evaluate early-stage equity financing term sheets.905Discussadd_shopping_cartTerm Sheet Template
A Simple Term Sheet Template by Gunderson Dettmer Law Firm2,700Discussadd_shopping_cartfreeby Gunderson Dettmer
How to Fully Understand a VC Term Sheet
Full descriptions of each aspect that makes up a VC term sheet.383Discussadd_shopping_cartfreeby Brad Feld
Term Sheet Template
Term Sheet Template for a Series A Round739Discussadd_shopping_cartfreeby BVCA
Annotated Series Seed Term Sheet
Annotated Series Seed Term Sheet Template923Discussadd_shopping_cartfreeby Gust
Seed Summit Term Sheets (Multiple)
General & Angel Term Sheet Templates given for 9 countries adapted specifically for each country.666Discussadd_shopping_cartfreeby Seed Summit
Openfund Term sheet Template
Term Sheet template for pre-seed and seed financing.875Discussadd_shopping_cartfreeby Jeremie Openfund
Term Sheet Template
Termsheet Template for the Issue of Ordinary Shares1,932Discussadd_shopping_cartfreeby EBAN
Founder-Friendly Term Sheet Template
Straightforward term sheet template with terms reflecting what a founder is generally more attracted by.3,586Discussadd_shopping_cartfreeby Sam Altman
Common Shares Term Sheet
Common Shares Term Sheet Template with accompanying notes to help understanding.1,026Discussadd_shopping_cartfreeby Naco Canada
Preferred Shares Term Sheet
A Preferred Term Sheet Template complimented with Educational Notes to help you.626Discussadd_shopping_cartfreeby Naco Canada
Convertible Loan Term Sheet
Convertible Loan Template with complimentary Educational Notes to help you.951Discussadd_shopping_cartfreeby Naco Canada
Canadian Safe Term Sheet
Canadian Simple Agreement for Future Equity Template with Educational Notes attached to help you.310Discussadd_shopping_cartfreeby Naco Canada
Newly published
Founder Friendly Term Sheets & Startup Contracts
Addendum for term sheets, employment agreements, bylaws, etc. with favorable terms for entrepreneurs.1,8162add_shopping_cartfreeby Eisaiah Engel
Term Sheet Word Template
This Term Sheet template is an effective template for outlining the terms of an investment opportunity.3,118Discussadd_shopping_cartfreeby CFI
Seed Enterprise Investment Scheme (SEIS) Model Term Sheet
A user friendly term sheet that is tailored for raising equity investments that qualify for tax relief2,007Discussadd_shopping_cartfreeby Jonathan Lea
Term Sheet Template
Termsheet Template for the Issue of Ordinary Shares1,932Discussadd_shopping_cartfreeby EBAN
Term Sheet Template
Term Sheet Template for a Series A Round739Discussadd_shopping_cartfreeby BVCA
Seed Summit Term Sheets (Multiple)
General & Angel Term Sheet Templates given for 9 countries adapted specifically for each country.666Discussadd_shopping_cartfreeby Seed Summit
VC Venture Capital Term Sheet Template - NVCA Model
A Series A Preferred Stock VC Term Sheet Template3,937Discussadd_shopping_cartfreeby NVCA
Angel Investment Term Sheet Template
A founder-friendly term sheet template for angel investment.6,506Discussadd_shopping_cartfreeby Jonathan Lea
The Plain Preferred Term Sheet
Simplified term sheet leaving out terms adding to complexity whilst aligning the incentives of founders and investors.1,299Discussadd_shopping_cartfreeby Founder Institute
Canadian Safe Term Sheet
Canadian Simple Agreement for Future Equity Template with Educational Notes attached to help you.310Discussadd_shopping_cartfreeby Naco Canada
Friends and Family Guidance on NACO Term Sheets
Case Study and Guidance concerning Friends & Family investments.264Discussadd_shopping_cartfreeby Naco Canada
Convertible Loan Term Sheet
Convertible Loan Template with complimentary Educational Notes to help you.951Discussadd_shopping_cartfreeby Naco Canada
Preferred Shares Term Sheet
A Preferred Term Sheet Template complimented with Educational Notes to help you.626Discussadd_shopping_cartfreeby Naco Canada
Common Shares Term Sheet
Common Shares Term Sheet Template with accompanying notes to help understanding.1,026Discussadd_shopping_cartfreeby Naco Canada
Founder-Friendly Term Sheet Template
Straightforward term sheet template with terms reflecting what a founder is generally more attracted by.3,586Discussadd_shopping_cartfreeby Sam Altman
Openfund Term sheet Template
Term Sheet template for pre-seed and seed financing.875Discussadd_shopping_cartfreeby Jeremie Openfund
Full catalog
Explanatory Brochure on the Anatomy of a Term Sheet
Explanatory brochure designed to help entrepreneurs understand and evaluate early-stage equity financing term sheets.905Discussadd_shopping_cartFriends and Family Guidance on NACO Term Sheets
Case Study and Guidance concerning Friends & Family investments.264Discussadd_shopping_cartfreeby Naco Canada
Seed Enterprise Investment Scheme (SEIS) Model Term Sheet
A user friendly term sheet that is tailored for raising equity investments that qualify for tax relief2,007Discussadd_shopping_cartfreeby Jonathan Lea
Convertible Loan Term Sheet
Convertible Loan Template with complimentary Educational Notes to help you.951Discussadd_shopping_cartfreeby Naco Canada
Common Shares Term Sheet
Common Shares Term Sheet Template with accompanying notes to help understanding.1,026Discussadd_shopping_cartfreeby Naco Canada
Founder Friendly Term Sheets & Startup Contracts
Addendum for term sheets, employment agreements, bylaws, etc. with favorable terms for entrepreneurs.1,8162add_shopping_cartfreeby Eisaiah Engel
Annotated Series Seed Term Sheet
Annotated Series Seed Term Sheet Template923Discussadd_shopping_cartfreeby Gust
Openfund Term sheet Template
Term Sheet template for pre-seed and seed financing.875Discussadd_shopping_cartfreeby Jeremie Openfund
VC Venture Capital Term Sheet Template - NVCA Model
A Series A Preferred Stock VC Term Sheet Template3,937Discussadd_shopping_cartfreeby NVCA
Term Sheet Template
Term Sheet Template for a Series A Round739Discussadd_shopping_cartfreeby BVCA
Angel Investment Term Sheet Template
A founder-friendly term sheet template for angel investment.6,506Discussadd_shopping_cartfreeby Jonathan Lea
Preferred Shares Term Sheet
A Preferred Term Sheet Template complimented with Educational Notes to help you.626Discussadd_shopping_cartfreeby Naco Canada
Term Sheet Template
Termsheet Template for the Issue of Ordinary Shares1,932Discussadd_shopping_cartfreeby EBAN
Seed Summit Term Sheets (Multiple)
General & Angel Term Sheet Templates given for 9 countries adapted specifically for each country.666Discussadd_shopping_cartfreeby Seed Summit
Founder-Friendly Term Sheet Template
Straightforward term sheet template with terms reflecting what a founder is generally more attracted by.3,586Discussadd_shopping_cartfreeby Sam Altman
Term Sheet Series A Template
Guidance for founders negotiating Series A funding.4,972Discussadd_shopping_cartfreeby Serious Funding
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