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A non binding agreement consisting terms & conditions for the investment is known as Investment Term Sheet. An Investment Term Sheet is a non binding document except clauses related to confidentiality and governing law. It is a type of principle agreement which consist valuation. It mainly consist discussions on which parties have agreed informally. After preparation of terms sheet, a due diligence process shall be carried out. Eventually parties will sign the agreement. No contractual obligation has been created by the term sheet on investor to make investment and on the company as well as to issue shares to the investor. Under this, details of the investors are given, valuation of the company, and the amount of investment.
Every type of investment requires proper negotiations for which such type of document is required. Investment Term Sheet is a non binding document under which terms & conditions are defined which are mutually agreed between the parties in relation to investment. Terms sheet is a non binding document thus do not have legal value and it cannot be enforced. It is drafted in a manner that no misunderstanding will occur in future. It will be treated as a reference document for drafting of legally binding contract. Now let’s understand some of the features of term sheet.
Things to be considered by the parties in term sheet An investment term sheet gives a base to future formation of legally binding agreements. At the time of making term sheet each & every clause and required provisions must be carefully analyzed, and proper discussion and negotiation should take place while preparing this. Every aspect and future impact should be considered while making. While making investment terms sheet and during negotiations, professionals may be hired or consulted for experience outlook and also for unbiased approach. By this, an unambiguous and exhaustive document can be made. You can contact us for the preparation of Investment term sheet as we have a team of professionals and we can assist you accordingly. Source url - http://entersliceindia.inube.com/blog/7921715/all-about-investment-term-sheet-for-startups
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