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Term Sheet - Investor

Term Sheet - Investor

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4.5 (11)
Under 10 minutes
Under 10 minutes
Last updated December 2018
Last updated February 18, 2020
Suitable for all Australian states and territories
Suitable for all Australian states and territories

A Term Sheet establishes the general terms of an investor joining your business. Customisable and ready to use in under 10 minutes.

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Document Overview

This Term Sheet is used in the lead up to Seed Round Investment, to establish the general terms of an investor coming on board in your business. It sets out the proposed terms including capitalisation, financing terms like liquidation preferences and anti-dilution, and key provisions to be included in the shareholders and subscription agreements, before you proceed to the full agreement. While the clauses binding the Term Sheet (i.e. confidentiality, exclusivity, enforceability and costs) are legally binding, the negotiated terms are not. This Term Sheet is intended to be used as a precursor agreement to a Shareholders Agreement.

Use this Term Sheet if:

You are preparing for Seed Round investment and would like to set out the negotiated terms to an investor to join your business.

Why do I need a Term Sheet?

If you are launching your seed investment round and looking at investors coming on board to join your business, a Term Sheet is a great document as a pre-cursor to a Shareholders Agreement. It sets out the negotiated terms and clearly states the intention of both parties to enter into a legally binding agreement in the near future.

What does the Term Sheet cover

  • Details of investor
  • Investment round details
  • Class of shares (preference or ordinary)
  • Investment amount
  • Percentage of equity
  • Liquidation preference
  • Conversion mechanics
  • Anti-dilution 
  • Dividends provision
  • Share cap table
  • Timetable to complete agreement
  • Key provisions of shareholders and subscription agreements
  • Details of board members
  • Details of shareholders
  • Decisions that need resolutions
  • Exclusivity
  • Confidentiality

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