A term sheet is a comprehensive document that outlines the essential elements and provisions of an agreement. It covers various aspects, including the potential investment amount, allocation of equity and cash resources, the duration for stock option vesting, rights to board representation, and compensation for management personnel, among other relevant factors. Term sheets are commonly used by startups when they seek funding from venture capitalists or private equity firms, a phase often referred to as “Series A” capital, which supports the company during its initial major growth round.
