Startup Investing

Term Sheet

Definition

What is Term Sheet?

A preliminary document outlining the main commercial terms of a proposed investment.

Example in practice

The term sheet states valuation, board rights, and liquidation preference.

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A company's agreed value immediately before a new investment.

A company's value immediately after adding new investment capital.

The maximum valuation used to convert a SAFE or convertible instrument into equity.

The rate at which a company spends cash, commonly measured monthly.

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