term sheet

Definition

A non-binding document outlining the key terms of an investment deal—think of it as a letter of intent that's about as reliable as a Tinder profile. The real fun begins when lawyers turn these bullet points into a 60-page agreement.

Example Usage

We got a term sheet from Sequoia on Tuesday, and by Friday our lawyers had found seventeen potential deal-breakers hidden in the fine print.

Origin

Investment banking terminology adopted broadly into venture capital in the 1970s-1980s

Fun Fact

Some VCs are famous for their aggressive term sheets—Benchmark's term sheet is notoriously founder-friendly, while others add clauses that would make Machiavelli blush.

Source: NVCA standards and venture capital documentation

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