Term Sheet

Definitions

1. A non-binding document outlining the key terms and conditions of a proposed investment. Typically includes valuation, investment amount, liquidation preferences, board seats, and anti-dilution provisions. The opening move in a negotiation, not the final word.

   In plain English: A summary of the deal terms a venture capitalist is proposing — how much they'll invest, what they'll get in return, and what control they'll have.

Etymology

1970s

Early venture capital deals use term sheets as non-binding summaries of investment terms before drafting full legal agreements

2004

Brad Feld and Jason Mendelson begin blogging about term sheets, demystifying VC deal terms for founders

2011

Y Combinator introduces the SAFE (Simple Agreement for Future Equity), simplifying early-stage term sheets to a single page

Related Terms

• Pitch Deck
• Down Round
• Due Diligence
• Cap Table
• SAFE
• Convertible Note
• Draft Term Sheet
• Drag Along
• Information Rights
• Initial Coin Offering
• Power Law
• Public Benefit Corporation
• Right of First Refusal
• ROFR
• SAFE Convertible Note
• Valuation Cap
• Venture Debt