A term sheet is usually non-binding document in bullet point format which sets the stage among parties for a transaction or financial investment (venture capital or angel investor). Term sheets represent the negotiated terms proposed to date. Some term sheets are binding.
Terms sheets are frequently associated with startups and frequently include information pertaining to funding, liquidation, and corporate governance.
Term sheets often include the following information:
- Valuation of the company
- amount of investment
- percentage stake sought
- voting rights
- liquidation preference
- anti-dilutive provisions
- investor commitment
Once the term sheet is executed, it provides the foundation for drafting the final agreement.
Here are some non-binding term sheets currently available from RealDealDocs.com:
1) Term Sheet
Great Lakes Gas Transmission Limited Partnership (“Great Lakes”) and TransCanada PipeLines Limited (“Shipper”) Term Sheet for Proposed Service (the “Term Sheet”)
2) Term Sheet
Chief Executive Officer Term Sheet – Stone Energy Corporation
3) Term Sheet
Weight Watchers International, Inc. Term Sheet for Employee Restricted Stock Unit Awards
4) Term Sheet
IDT Corporation, SPIP LLC, Straight Path Communications Inc, Straight Path IP Group, Inc
RealDealDocs also offers examples of professionally drafted binding term sheets:
Binding Term Sheet for GAMING & LEISURE PROPERTIES, INC., Bank of America, CBRE, Inc, GAMING AND LEISURE PROPERTIES, INC, Gold Merger Sub, LLC, Newco LLC, PENN NATIONAL GAMING, INC, Penn, Tropicana Las Vegas, Inc, GLP Capital, LP, Tropicana PA
Abbott Laboratories, Advanced Life Sciences Holdings, Inc
Bullion Monarch Mining, Inc.
DraftDay Fantasy Sports, Inc, Rant, Inc