A term sheet is a mostly non-binding summary of the key terms of an investment: valuation and amount, instrument (equity, CCPS or convertible notes), liquidation preference, anti-dilution, board composition, protective provisions, founder vesting, ESOP pool, and conditions to closing. Confidentiality, exclusivity and governing law clauses are usually binding.
Economic terms
- Pre-money valuation and amount
- Instrument and conversion
- Liquidation preference
- Anti-dilution
- ESOP pool sizing
Control terms
- Board seats and observers
- Reserved matters
- Information rights
- Founder vesting and lock-in
Indian regulatory points
FEMA pricing for foreign investors, valuation reports and share allotment timelines apply.
Short on time? Leegal can handle Term Sheet for you, end to end.
Get expert help →Negotiation tips
Focus on liquidation preference, control rights and ESOP pool placement, not just valuation.
Frequently asked questions
Is a term sheet legally binding?
Mostly not, except specified clauses like confidentiality and exclusivity.
What is 1x non-participating preference?
Investors get back their investment or convert to common, whichever is higher, on exit.
Why do investors prefer CCPS?
CCPS offer preference and flexibility and suit FEMA requirements.
What follows a term sheet?
Due diligence, then definitive SHA and SSA.
Let Leegal handle your Term Sheet
Documentation, filing and follow-up by a dedicated expert, so you can focus on running your business.
- Dedicated point of contact
- Transparent pricing
- Pan-India service