# Term sheet

Concept · [Fundraising and equity](https://ecosystem.samcarlton.com/fundraising)

Also called: termsheet, terms, offer

A short document that lays out the main terms of a proposed investment, such as the amount, the [valuation](https://ecosystem.samcarlton.com/valuation) and the investor's rights. Most of it is usually not legally binding. It is the starting point for the final contracts.

**For example:** After several meetings, an investor sends you a two-page term sheet. You review it with a lawyer before signing, and the full legal documents follow.

## Connects to (7)

- [Valuation](https://ecosystem.samcarlton.com/valuation): What the company is agreed to be worth for the purpose of an investment.
- [Due diligence](https://ecosystem.samcarlton.com/due-diligence): The checking an investor or buyer does before committing money: reviewing your finances, legal documents, product and the claims you have…
- [Series A](https://ecosystem.samcarlton.com/series-a): Usually the first larger funding round led by a venture capital firm, where investors buy shares at a set price.
- [Letter of intent](https://ecosystem.samcarlton.com/letter-of-intent): A short document that sets out what two parties intend to agree on, such as a purchase once a product exists.
- [Lead investor](https://ecosystem.samcarlton.com/lead-investor): The investor who negotiates the terms of a round with the founders and usually puts in the largest share of the money.
- [Liquidation preference](https://ecosystem.samcarlton.com/liquidation-preference): A term that sets who gets paid first, and how much, when a company is sold or shut down.
- [Board of directors](https://ecosystem.samcarlton.com/board-of-directors): The group that a corporation's shareholders elect to oversee the company.

> This glossary is plain-language orientation, not legal or financial advice. Before you decide on a company structure, a contract, taxes or a fundraising deal, talk with a lawyer or an accountant.

Map view: https://ecosystem.samcarlton.com/term-sheet