Term Sheet
A short document outlining the proposed terms of an investment — valuation, amount, and investor rights — before the full legal paperwork is drafted.
Quick Answer
Is a term sheet legally binding once both sides sign it?
Mostly no — the commercial terms are typically non-binding and subject to further negotiation and diligence, though specific clauses like confidentiality, exclusivity, and no-shop provisions are usually binding immediately upon signature.
- Most economic terms remain negotiable after signing
- Confidentiality and exclusivity clauses usually ARE binding
- Read which specific sections are binding before you sign
The Lovie Advantage
Lovie models a term sheet's proposed terms against your actual cap table before you commit to anything in writing.
See how this connects to Anti-Dilution Provision. For the formal definition, see the SBA's guide to funding your business.
Start Free with Lovie →