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Term Sheet Definition

term sheet ā€“ 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 VCā€™s investment offer ā€“ 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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