term sheet – n : legal/venture capital term; a
legal document, sent from a venture capital firm to a company in which they are
interested in investing, that summarizes the terms of VC’s investment offer – number
of shares they are interested in purchasing, price per share they are willing
to pay, terms describing the security (preferences, etc.), and other terms and
conditions (whether they want representation on the board of directors, for
example). The term sheet serves as the basis for the financing negotiation
between the VC and the company; once all terms are agreed upon, the term sheet serves
as the basis for lawyers to draft the formal investment agreement between the
two parties.
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Adapted from "The CompanyCrafters Entrepreneur's Dictionary"
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