Term Sheet

A short, mostly non-binding document that lays out the key terms of an investment: valuation, amount, share type, board rights, and protective provisions, before the full legal paperwork.

Why it matters

The term sheet is where the real negotiation happens; the long-form documents mostly formalize it. Learning to read one, especially the terms beyond valuation, is one of the highest-leverage skills a founder can build.

For example

The lead sends a two-page term sheet: 6 crore at a 24 crore pre-money, 1x non-participating preference, one board seat, and a 12 percent option pool.

Worth your time

Our Top 10 Term Sheet Hacks Venture Hacks · article The classic founder-side cheat sheet for negotiating a term sheet, what to push on and what to concede, from the people who wrote the book on it. Open venturehacks.com →

Term Sheet: Liquidation Preference Feld Thoughts · article Feld's term-sheet series breaks down the single most consequential clause after valuation, in the same plain style as the rest of the series. Open feld.com →

Related terms

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See how founders actually handle this on Raising your first round, part of the Starting Up hub.

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