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TERM SHEET DRAFTING
A term sheet is a binding / non-binding document that outlines the terms and conditions of a potential deal between two parties. It outlines the key terms and conditions, such as price, financing, and governance, that would be included in a formal agreement. A term sheet is typically used in the initial stages of negotiating a business transaction, such as a venture capital investment, acquisition, or partnership, and acts as a roadmap for further negotiations.
A term sheet is a generally non-binding agreement that captures the basic terms and conditions of an investment. The term sheet serves as a template and basis for more detailed, legally binding documents. Once the parties involved reach an agreement on the details laid out in the term sheet, a binding agreement or contract that conforms to the term sheet details is drawn up.
How it works?
Share deal terms
Provide proposed investment amount, valuation, investor rights, and key conditions for the deal.
Term sheet drafting
Our lawyer drafts the term sheet with valuation, governance, exit rights, and protective provisions.
Review & negotiation
Review binding vs non-binding terms and negotiate key provisions with our startup lawyer.
Final delivery
Term sheet delivered — clear framework for moving to definitive agreement and closing.
Contents of Term Sheet
The following clauses form part of a well drafted Term Sheet:-
- Name of the company in which the investment is being made
- Type of security to be issued
- Conversation rate of convertible securities
- Veto rights
- Founder's lock-in
- Drag along
- Tag along
- Right of first refusal (ROFR)
- Right of first offer (ROFO)
- Reps & Warranties
- Exit rights
- Governing law and Dispute Resolution
Laws governing the Term Sheet in India
The different laws which govern various aspects of Term Sheet in India are as follows:
- Companies Act, 2013 and various rules framed thereunder
- The Indian Contract Act, 1872
- Foreign Exchange Management Act, 1999
- Consolidated FDI Policy, 2020
- RBI Policies
- Competition Act, 2002
- SEBI Guidelines (in case of listed company)
Why Legitax
- Senior Corporate Expert Lawyers: We will get your document drafted/reviewed by Senior Expert Corporate lawyers. You can track the progress of your document on our platform at all times.
- 4.5 Customer Score: Clients are delighted with our service! They have consistently rated us high because of our focus on delivering quality output and providing regular updates.
- Responsible Delivery: Our team of experienced business advisors are just a phone call away. Our team will ensure that your interaction with the expert lawyer is smooth and seamless and the document draft is delivered to you within the committed timeline.
Deliverables
Our standard deliverables for every document drafting includes:
- 60 Minutes of Talk-Time with the Lawyer for drafting/reviewing the Agreement
- First draft of the documents will be delivered to you within a maximum of 2 working days
- Post-delivery of the first draft – Iterations in the master Document to incorporate your suggestions/changes
Chat with us
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Hear what our users have to say
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The Legal advice I get is straightforward and easy to understand, which is important for me. Using Legitax has taken away a lot of stress when it comes to legal matters. I definitely recommend it to anyone looking for quick and reliable legal help.
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Bhavesh Jain
Jaipur, Rajasthan
I was really impressed with the quality of legal advice I received. The lawyer was patient, knowledgeable, and took the time to explain everything in detail. It felt like having a personal legal advisor at my fingertips.
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Amritsar, Punjab
Very convenient service. I needed urgent legal advice regarding a property dispute and was connected with a qualified lawyer within minutes. The consultation was thorough and the advice was practical and actionable.
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Patna, Bihar
Excellent platform for legal consultations. The process is seamless and the lawyers are very professional. I got my documents reviewed quickly and the feedback was comprehensive. Highly recommended for anyone needing legal assistance.
Preety Singh
Lucknow, Uttar Pradesh
Legitax made the entire process of getting legal help so much simpler. From consultation to document drafting, everything was handled professionally. The pricing is transparent and reasonable.
Arvind Pratap
Bhopal, Madhya Pradesh
I've been using the Legitax app and it's really made dealing with legal stuff easier. It's great how I can just open the app and quickly find a legal expert to talk to, no matter what time it is. Every time I've had a question, big or small, I've gotten easy-to-understand answers from their experts. The app is super easy to use too, which is a big plus for me. I feel more confident handling legal things now. Legitax has been a big help!
Vijay Kanoor
Bengalore, Karnataka
The Legal advice I get is straightforward and easy to understand, which is important for me. Using Legitax has taken away a lot of stress when it comes to legal matters. I definitely recommend it to anyone looking for quick and reliable legal help.
Krishnamoorthy B
Chennai, Tamil Nadu
The advocate I connected with on Legitax was incredibly helpful, clearing up many doubts I had. They offered solutions and insights into issues that were affecting my family and me. I've had such a positive experience that I wouldn't hesitate to recommend Legitax to my friends.
Bhavesh Jain
Jaipur, Rajasthan
I was really impressed with the quality of legal advice I received. The lawyer was patient, knowledgeable, and took the time to explain everything in detail. It felt like having a personal legal advisor at my fingertips.
Lata Sharma
Amritsar, Punjab
Very convenient service. I needed urgent legal advice regarding a property dispute and was connected with a qualified lawyer within minutes. The consultation was thorough and the advice was practical and actionable.
Prakesh Ranjan
Patna, Bihar
Excellent platform for legal consultations. The process is seamless and the lawyers are very professional. I got my documents reviewed quickly and the feedback was comprehensive. Highly recommended for anyone needing legal assistance.
Preety Singh
Lucknow, Uttar Pradesh
Legitax made the entire process of getting legal help so much simpler. From consultation to document drafting, everything was handled professionally. The pricing is transparent and reasonable.
Arvind Pratap
Bhopal, Madhya Pradesh
Frequently asked questions
A term sheet is an agreement that is executed between the prospective investor and the company. It is usually entered into before the process of due diligence begins and it lays a foundation on which the more definitive documents, such as Share Subscription and Shareholder's Agreement are prepared at a later stage.
A Term Sheet is usually non-binding document by the very nature of it. With that being said, nothing stops the parties from entering into a binding Term Sheet. In fact, a few clauses of the Term Sheet, such as governing law and dispute resolution, NDA, etc. are usually kept binding.
After the parties have executed the Term Sheet, the lenghty and crucial process of due diligence follows on the investee company, and afterwards, the parties enter into more definitive documents, such as Shareholder's Agreement, to give legal and binding effect to the investment.
No. It is not mandatory to enter into a Term Sheet. However, most investors and founders prefer to enter into a Term Sheet that lays out the foundation of the major terms, upon which the definitive documents are later prepared.
Usually, it is the investor who presents the Term Sheet to the founders of the investee company.