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.
Go deeper
Related terms
Also in Starting Up
See how founders actually handle this on Raising your first round, part of the Starting Up hub.
eChai Partner Brands
