Term Sheet

A term sheet is a short document that sets out the main terms of a proposed investment or deal, before the long formal contracts are written. It covers the essentials, such as how much money, for what share of the business and on what conditions, so both sides agree the shape of the deal early.

It is like agreeing the headline terms of a house sale, the price and the settlement date, before the solicitors draft the full contract. A term sheet matters because it surfaces the deal-breakers cheaply and quickly, so time and legal cost are spent only once both sides broadly agree.