Term Sheets

Negotiate the key terms of your investment before they are locked into the final agreements.

A term sheet sets out the main commercial and legal terms of an investment: valuation, the rights attached to the investor’s shares and how the company will be governed. Most of it is non-binding, but the final agreements usually follow it closely, so the term sheet is where founders and investors have the most room to shape the deal.

Key terms we negotiate

  • Valuation and dilution: pre-money and post-money valuation, and how the option pool is counted.
  • Liquidation preference: who is paid first on an exit, and whether the preference is participating.
  • Anti-dilution protection: broad-based weighted average versus full ratchet.
  • Board and governance: board seats, observers and investor approval rights over reserved matters.
  • Founder terms: vesting, leaver provisions and restraints.
  • Transfer and exit rights: pre-emptive rights, rights of first refusal, tag-along and drag-along.
  • Binding provisions: exclusivity, confidentiality and costs.

From term sheet to closing

Once signed, the term sheet is turned into a subscription agreement, a shareholders’ agreement and usually an amended MOI. We make sure the documents reflect what was agreed and that the necessary Companies Act approvals are in place.

Founder and investor perspectives

We act for founders and for investors. Either way, we focus on terms that are market-standard, workable for the company and appropriate to the stage of the round.

When we can help

We assist founders and investors who:

  • Have received a term sheet and need it reviewed.
  • Are preparing a term sheet to offer investors.
  • Are negotiating a seed, Series A or later round.
  • Are raising through a SAFE or convertible loan.
  • Want to understand dilution and exit outcomes.
  • Need the term sheet converted into transaction documents.

How the process works

From term sheet to closing.

  1. Review
    We compare the terms with market practice for your stage of funding.
  2. Advise
    We explain the impact of each term on control, dilution and exit outcomes.
  3. Negotiate
    We propose changes and handle the markup with the other side.
  4. Document
    We prepare the subscription agreement, shareholders’ agreement and MOI.
  5. Close
    We attend to approvals, the share issue and post-closing filings.

Take advice before you sign, especially before agreeing to exclusivity, which limits your ability to negotiate with other investors.

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What to prepare

Helpful documents for your matter.

  • The draft term sheet.
  • Your current cap table.
  • The MOI and any existing shareholders’ agreement.
  • Details of earlier rounds or convertibles.
  • Your pitch deck and use of funds.

Common Questions

Most commercial terms are usually non-binding, but clauses such as exclusivity, confidentiality, costs and governing law are typically binding. The wording of the term sheet determines which is which.
It gives investors the right to receive their investment back, or a multiple of it, before other shareholders on an exit. A 1x non-participating preference is common in early-stage rounds.
Pre-money is the company’s value before the new investment, and post-money is its value immediately after. The investor’s shareholding is its investment divided by the post-money valuation.
It depends on due diligence, the number of parties and the approvals required. A well-prepared company with clean records closes faster.
Full ratchet is strongly investor-friendly and uncommon in balanced deals. Broad-based weighted average protection is the more usual market position.

RECEIVED A TERM SHEET?

We help founders and investors negotiate term sheets that are fair, market-standard and built for the next round.

Read more: Capital Raising · Startups · Capital Raising Readiness

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This page is general information and not legal advice.

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