Term Sheet Template (Venture, Growth Equity or Loan)
Economics and pool, preferred rights, waterfall and anti-dilution maths, governance, transfer terms, conditions, loan annex, binding clauses, negotiation log
How to use: Use it when a company and investor or lender negotiate a round or facility and need one shared working sheet. Fill the economics and option pool first, because price per share depends on them. The main pitfall is agreeing a pre-money valuation without settling whether the pool top-up sits inside it.
Preview
Term Sheet: [Company name], [Round or facility]
Working term sheet for a venture or growth equity round, with an annex for a loan facility: economics, investor protections, governance, conditions and a negotiation log, plus worked numbers for price per share, option pool, liquidation preference and anti-dilution. Structure informed by publicly available model documents, cited by name only: the NVCA model legal documents (US) and the BVCA early-stage model documents (UK); for loans, the recommended forms of the Loan Market Association (LMA) and the LSTA. Replace every
[bracketed]value and every row marked Example. This is a documentation format, not legal, tax, investment or financial advice; check the current official text and a qualified professional.
Document control
| Field | Value |
|---|---|
| Document ID | [TS-YYYY-NNN] Example: TS-2027-002 |
| Company | [Legal name, jurisdiction] Example: Quorvia Labs, Inc., Delaware |
| Instrument | [Series A preferred / growth equity / senior term loan] Example: Series A preferred stock |
| Lead investor or lender | [Name] Example: Kestrelmoor Ventures Fund II |
| Version | [Draft 1] |
| Status | [Draft / Under negotiation / Agreed / Signed] |
| Owner | [@company-cfo] |
| Approvers/reviewers | [@ceo], [@company-counsel], [@investor-counsel], [@board] |
| Last updated | YYYY-MM-DD |
| Classification | [Confidential] |
| Expiry of offer | YYYY-MM-DD |
Approvals
| Role | Name | Decision | Date |
|---|---|---|---|
| Company CEO | [@name] | [Accept / Counter] | YYYY-MM-DD |
| Lead investor partner | [@name] | [Accept / Counter] | YYYY-MM-DD |
| Company board | [@name] | [Approve signing] | YYYY-MM-DD |
Revision history
| Version | Date | Author | Change summary |
|---|---|---|---|
| Draft 1 | YYYY-MM-DD | [@name] | Investor's first draft |
| Draft 2 | YYYY-MM-DD | [@name] | Example: Company comments on pool and board |
| Final | YYYY-MM-DD | [@name] | Example: Signed |
1. Offering terms and economics
| Term | Proposed | Company position | Agreed |
|---|---|---|---|
| Amount raised (Example) | USD 8,000,000, lead USD 6,000,000 | Accept | Yes |
| Pre-money valuation (Example) | USD 24,000,000, fully diluted, including the pool top-up | Pool top-up outside pre-money | Open |
| Post-money valuation (Example) | USD 32,000,000 | Follows | |
| Price per share (Example) | USD 2.00 | Follows | |
| Option pool (Example) | 12% of post-money fully diluted | 10% | Open |
| Closing (Example) | Single closing; second closing within 90 days for up to USD 1,000,000 | Accept | Yes |
1.1 Worked numbers
Example: pre-money USD 24,000,000 / price USD 2.00 = 12,000,000 fully diluted pre-money shares. New shares: 8,000,000 / 2.00 = 4,000,000. Post-money fully diluted: 16,000,000 shares; investors hold 25.0%. A 12% post-money pool is 1,920,000 shares; with 800,000 shares unallocated today, the top-up of 1,120,000 is inside the pre-money, so the existing fully diluted shares (including the 800,000 unallocated options) are 12,000,000 - 1,120,000 = 10,880,000 before the top-up.
2. Investor rights in the preferred shares
| Term | Proposed | Company position | Agreed |
|---|---|---|---|
| Liquidation preference (Example) | 1x, non-participating, senior to common | Accept | Yes |
| Dividends (Example) | Non-cumulative, 6%, when declared | Accept | Yes |
| Conversion (Example) | Optional at any time; automatic on qualified IPO or majority vote | Accept | Yes |
| Anti-dilution (Example) | Broad-based weighted average | Accept | Yes |
| Protective provisions (Example) | Series A majority consent for listed matters | Narrow the list | Open |
| Redemption (Example) | None | Yes |
2.1 Liquidation waterfall
Example: Series A holds 4,000,000 of 16,000,000 shares (25%) and a 1x preference of USD 8,000,000. It takes the higher of the preference and its as-converted share.
| Exit value (USD) | Preference | As converted (25%) | Series A takes | Common and pool |
|---|---|---|---|---|
| 20,000,000 | 8,000,000 | 5,000,000 | 8,000,000 | 12,000,000 |
| 32,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 24,000,000 |
| 60,000,000 | 8,000,000 | 15,000,000 | 15,000,000 | 45,000,000 |
The indifference point is USD 32,000,000, the post-money valuation.
2.2 Broad-based weighted-average anti-dilution
Example: a later round issues 2,000,000 shares at USD 1.50 (USD 3,000,000). With A = 16,000,000 shares outstanding on a fully diluted basis, B = 3,000,000 / 2.00 = 1,500,000 and C = 2,000,000, the new conversion price is 2.00 x (16,000,000 + 1,500,000) / (16,000,000 + 2,000,000) = USD 1.9444. Series A then converts into 4,000,000 x 2.00 / 1.9444 = 4,114,286 common shares.
3. Governance and information
| Term | Proposed | Company position | Agreed |
|---|---|---|---|
| Board (Example) | 5 seats: 2 common, 1 Series A, 1 CEO, 1 independent agreed by both | Accept | Yes |
| Information rights (Example) | Annual audited accounts within 120 days, quarterly management accounts within 45 days, annual budget | Accept | Yes |
| Pro rata right (Example) | Major investors (USD 1,000,000 or more) | Accept | Yes |
| Founder vesting (Example) | 4 years, 1-year cliff, credit for 18 months served | Credit 24 months | Open |
4. Transfer and exit terms
| Term | Proposed | Company position | Agreed |
|---|---|---|---|
| Right of first refusal and co-sale (Example) | On founder transfers | Accept | Yes |
| Drag-along (Example) | Board, Series A majority and common majority | Add minimum 1x return floor | Open |
| Registration rights (Example) | Customary demand and piggyback rights | Accept | Yes |
5. Conditions and timing
| Condition | Owner | Target |
|---|---|---|
| Satisfactory due diligence (Example) | Investor counsel | YYYY-MM-DD |
| Long-form documents agreed (Example) | Both counsel | YYYY-MM-DD |
| Board and stockholder approvals (Example) | Company counsel | YYYY-MM-DD |
| Regulatory clearances, if any (foreign investment screening) (Example) | Both | YYYY-MM-DD |
6. Annex: loan facility terms
| Term | Proposed | Borrower position | Agreed |
|---|---|---|---|
| Facility (Example) | USD 5,000,000 senior secured term loan | ||
| Tenor and repayment (Example) | 4 years, 12-month interest-only then straight-line | ||
| Interest (Example) | Reference rate plus margin [x]% | ||
| Fees (Example) | Arrangement fee [x]%, commitment fee on undrawn amount | ||
| Security (Example) | First-ranking over all assets | ||
| Financial covenants (Example) | Minimum liquidity USD 2,000,000; tested monthly | ||
| Events of default (Example) | Non-payment, covenant breach, insolvency, change of control |
7. Binding provisions, signatures and negotiation log
Binding clauses: confidentiality, exclusivity of [N] days, costs (cap USD [amount] payable by the company on closing) and governing law [jurisdiction]. All other terms are non-binding until long-form documents are signed.
| Log ID | Date | Term | Change | Reason |
|---|---|---|---|---|
| NEG-001 (Example) | YYYY-MM-DD | Option pool | 12% proposed, 10% countered | Hiring plan needs 1,600,000 shares |
| NEG-002 (Example) | YYYY-MM-DD | Drag-along | Floor added | Protect common in low exits |
Standard and licence note
Structure informed by the publicly available NVCA model legal documents (nvca.org, checked 2026-10-30), the BVCA early-stage model documents and, for the loan annex, the LMA and LSTA recommended forms, all cited by name only; no wording from those documents is reproduced. The NVCA documents state that they are starting points and not legal advice. Check the current model documents and local law. Quorvia Labs, Inc., Kestrelmoor Ventures Fund II and every figure are fictional. This template is original text and is not legal, tax, investment or financial advice; check the current official text and a qualified professional. Template licence: MIT.
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