Term Sheets are often required by angel investors and nearly always required by professional investors.
While it’s natural for a corporate founder or entrepreneur to focus on describing to potential investors what (s)he needs from them, the Term Sheet is primarily intended to more clearly defines “what’s in it” for the potential investor.
A highly complex, 20- or 30-page Term Sheet is probably best put together by qualified legal counsel. In such a case, we will work with your lawyer to handle the text in the Term Sheet that specifically relates to the financial elements of the business plan and specific share ownership issues (including any obligations of the company to its shareholders, such as the conditions required before the company is required to pay dividends to shareholders).
For a simple two- or three-page Term Sheet there may be no need to involve an attorney other than for final review and approval.
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