Term sheet

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A term sheet is a bullet-point document outlining the material terms and conditions of a business agreement. After a Term Sheet has been "executed", it guides legal counsel in the preparation of a proposed "final agreement". It then guides, but is not necessarily binding, as the signatories negotiate, usually with legal counsel, the final terms of their agreement.

Term sheets are very similar to "letters of intent" (LOI) in that they are both preliminary, mostly non-binding documents meant to record two or more parties' intentions to enter into a future agreement based on specified (but incomplete or preliminary) terms. The difference between the two is slight and mostly a matter of style: an LOI is typically written in letter form and focuses on the parties intentions; a term sheet skips most of the formalities and lists deal terms in bullet-point or similar format. There is an implication that an LOI only refers to the final form. A term sheet may be a proposal, not an agreed-to document.

[edit] See also

• Letter of intent
• Memorandum of understanding

[edit] External links

This article needs additional citations for verification. Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. (May 2008)

• Definition from Investopedia

• Example term sheet from Center for Professional Development OHSU/OGI

• Model Term Sheet from National Venture Capital Association (NVCA)

• Brad Feld's Term Sheet Series – An explanation of common venture capital term sheet terms.

• Term Sheet Hacks – An entrepreneur's guide to hacking venture capital term sheets.