Term Sheet

A term sheet outlines principal terms of a proposed investment or financing, serving as a roadmap for definitive agreements while typically remaining non-binding except for specific provisions.

Term Sheet ContentsSection
Transaction overviewAsset, parties, structure
Economic termsPrice, payment, returns, fees
GovernanceDecision-making, approvals, voting
Conditions precedentRequirements before closing
Representations and warrantiesSeller/borrower assurances
Exclusivity and confidentialityBinding provisions
Definitive documentationTimeline for final agreements


Negotiation TimelineDuration
Initial proposalDay 1
First draft term sheetDays 3 to 7
Negotiation rounds1 to 3 weeks
Agreed term sheetWeek 2 to 4
Due diligence period4 to 8 weeks
Definitive documentation4 to 8 weeks
Closing10 to 16 weeks from initial term sheet

Related Terms

Letter of Intent (LOI) Preliminary AgreementBinding TermsTransaction Structure

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