Overview
A Term Sheet is a non-binding bulleted document that summarizes the key terms and conditions of a proposed investment. It serves as a “Letter of Intent” between a Startup and an Investor (Angel or VC). While most of it is non-binding, it sets the stage for the Shareholders Agreement (SHA) and Subscription Agreement (SSA)
At Vakalatexpert.in , we ensure that your Term Sheet is balanced. We protect founders from “aggressive” investor clauses that could lead to a loss of control, while ensuring the terms are attractive enough to close the deal.
Key Components of a Strategic Term Sheet
A well-drafted Term Sheet must address the “Big Three”: Valuation, Control, and Exit. Our drafts include:
Instrument of Investment
Specifies whether the investment is via Equity Shares, CCPS (Compulsorily Convertible Preference Shares), or CCD (Compulsorily Convertible Debentures).
Veto Rights (Reserved Matters)
A list of major decisions (like selling the company or changing the business line) that require the investor’s specific approval.
Exclusivity (No-Shop Clause)
A binding clause that prevents the founder from talking to other investors for a specific period (usually 30–60 days) while this deal is being finalized.
Why Choose Vakalatexpert.in for your Term Sheet?
Founder-Centric Approach
We help you identify "Toxic Clauses" like excessive veto rights or participating liquidation preferences that can hurt you in the future.
Standard Market Practices
We ensure your terms are "Market Standard," making the due diligence process smoother for VCs.
Negotiation Support
We don't just draft; we coach you on which terms to fight for and where to be flexible.
Speed to Close
A clear, professional Term Sheet from us reduces the time spent in back-and-forth legal arguments, helping you get the funds faster.
Exclusive Frequently Asked Questions (FAQs)
Generally, no. Most clauses are "Non-binding" expressions of interest. However, clauses like Confidentiality and Exclusivity (No-Shop) ARE legally binding and can lead to penalties if broken.
Pre-money is what your company is worth before the investment. Post-money is the Pre-money value PLUS the investment amount. We help you calculate this correctly to avoid over-diluting your equity.
These are "Veto Rights" given to investors. They ensure the founder cannot make massive changes (like taking a huge loan or selling the IP) without the investor's consent.
CCPS (Compulsorily Convertible Preference Shares) give investors "Preference" in dividends and liquidation, making it the standard instrument for startup funding in India.
No. Most Term Sheets include an Exclusivity Clause that prevents you from "shopping around" for a better deal once you have signed the initial document.
Our Deliverables
Capitalization Table (Cap Table) Projection.
Negotiation Cheat-Sheet (Highlighting risks and trade-offs).
Affordable, confidential, and instant solutions for all your legal worries.