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A term sheet can be defined as a non-binding agreement that sets out the basic conditions for making an investment. It serves as a template for developing more detailed documents that are legally binding.Once an agreement has been reached between the parties concerned on the details set out in the term sheet, an agreement or contract will be drawn up that conforms to the details of the term sheet.
(1) It acts as an overview of all the critical terms that need to be conveyed to both the parties. Having a clear view of the terms of an investment in one document makes the term sheet transparent and fair to the parties.
(2) While a term sheet has no definite legal obligation, it does have binding clauses such as confidentiality and exclusivity clauses.
(3) Confidentiality clauses are self-explanatory. They bind the parties to the term sheet into confidence.
(4) Exclusivity clauses are also known as “no shop clauses”. They prevent the company from looking for other investors for a certain period, while the term sheet is being negotiated.
(5) A term sheet acts as a ready reference in latter stages of negotiation between a company and the investor
(1) Negotiating the term sheet.
(2) Going through due diligence.
(3) Negotiating the terms of the final contract.
(4) Deal Finalization
(5) Start-up due diligence
(6) Contract agreement
(7) How long it will take to convert the term sheet to a signed deal
(1) What is Term Sheet?
(2) Is a term sheet binding?
(3) What are the basic elements of the term sheet?
(4) Is the term sheet is lawful?
