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An investment agreement term sheet lays out the key points of a potential investment deal in plain language before creating the full legal documents. It's like a high-level roadmap that outlines crucial details such as investment amount, company valuation, investor rights, and voting privileges.

While not legally binding (except for specific clauses like confidentiality), term sheets save time and money by getting all parties to agree on major deal points early. Venture capital firms, angel investors, and startup founders regularly use these documents to streamline negotiations and avoid misunderstandings before spending resources on detailed legal agreements.

Use an investment agreement term sheet when you're ready to move from informal investment discussions to serious negotiations. This typically happens after initial meetings where both sides show genuine interest, but before spending time and money on complete legal documentation. It's especially valuable when dealing with venture capital firms, angel investors, or strategic corporate investors.

The timing is crucial - introduce the term sheet once you have preliminary agreement on core deal terms but before engaging expensive lawyers for full documentation. This approach helps avoid costly misunderstandings and streamlines the negotiation process. Many founders present term sheets after receiving verbal interest in leading a funding round.

• Equity Investment Term Sheet: Used for traditional venture capital or angel investments, focusing on share price, ownership percentages, and board rights
• Convertible Note Term Sheet: Outlines debt that converts to equity, including conversion triggers, discounts, and valuation caps
• SAFE Term Sheet: Popular among startups, detailing simple agreements for future equity without debt components
• Strategic Investment Term Sheet: Includes special provisions for corporate investors, like commercial agreements or right of first refusal
• Bridge Round Term Sheet: Designed for interim financing, typically with shorter terms and specific milestone requirements

• Startup Founders: Create or review term sheets when seeking investment, often working with lawyers to ensure terms protect company interests
• Venture Capital Firms: Usually draft the initial term sheet, setting investment terms and conditions based on their standard templates
• Angel Investors: Review and negotiate term sheets for early-stage investments, often preferring simpler terms than VCs
• Corporate Lawyers: Advise both sides on term sheet implications and help negotiate key points before formal documentation
• Investment Bankers: Often facilitate larger deals and help structure term sheets for later-stage investments or acquisitions

• Company Details: Gather current cap table, financial statements, and corporate formation documents
• Investment Structure: Determine valuation, investment amount, and type of security being offered
• Key Rights: Define board seats, voting rights, anti-dilution protection, and information rights
• Exit Terms: Outline liquidation preferences, participation rights, and drag-along provisions
• Due Diligence: Prepare list of material contracts, intellectual property, and employee agreements
• Custom Elements: Our platform helps generate legally sound term sheets tailored to your specific investment scenario

• Investment Terms: Specify amount, valuation, security type, and price per share
• Investor Rights: Detail voting privileges, board representation, and information access rights
• Economic Terms: Include liquidation preferences, anti-dilution protection, and dividend rights
• Binding Provisions: Mark confidentiality, exclusivity, and governing law as legally binding sections
• Closing Conditions: List required due diligence, approvals, and documentation for deal completion
• Legal Framework: Our platform automatically includes all essential elements in compliance with U.S. securities laws

An investment agreement term sheet differs significantly from a full Investment Agreement in several key aspects. While both documents relate to investment transactions, their purpose, legal weight, and timing in the deal process vary considerably.

• Legal Binding Status: Term sheets are mostly non-binding (except for specific provisions like confidentiality), while investment agreements are fully binding legal contracts
• Level of Detail: Term sheets provide high-level bullet points of key terms, while investment agreements contain comprehensive legal language and complete transaction details
• Timing: Term sheets come first as negotiation tools, while investment agreements are the final documentation that closes the deal
• Cost and Complexity: Term sheets are relatively simple and inexpensive to prepare, while investment agreements require significant legal work and associated costs