Term Sheet Word Template

This Term Sheet template is an effective template for outlining the terms of an investment opportunity.

by CFI
Corporate Finance Institute® (CFI) - Official provider of the Financial Modeling & Valuation Analyst (FMVA)™Follow 324

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Description
This Term Sheet Template from CFI is a fundamental document in private capital raising transactions.

A Term Sheet is a proposal agreement laying out the main terms and conditions surrounding an investment that could be made. More intricate and in-depth legal documents will then be drafted to accompany and elucidate the term sheet. Since there is no signatory aspect, this is a nonbinding agreement and thus performs more akin to an offer.

This model template is a simple document but contains some complicated terms.

Here are some definitions to aid you in your use of the template:

1. Capitalization – the total sum of a company’s stock, long-term debt, and retained earnings
2. Liquidation Rights – this sets out what will be received by which shareholders in the event of the corporation’s liquidation
3. Voting Rights – this defines who among the shareholders may vote on certain policy issues

Before a Term Sheet is delivered to the potential investors, typically three other documents will be sent. These are a Teaser, also know as a 1-Pager, and a Non-Disclosure Agreement (NDA); and then after the signing of an NDA, a Management Presentation will be sent. This is accompanied, or followed, by the Term Sheet and Offering Memorandum, before the final document – the Subscription Agreement.

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1 Word Template