Term Sheet
Preparation and review of startup term sheets covering investment terms, valuation, ownership, investor rights, conditions, and transaction structure.
- Estimate Cost
- ₹10,000 – ₹75,000
- Typical duration
- 5 days
Service overview
- Legal drafting and review of a Term Sheet setting out the principal commercial and legal terms proposed for an investment, financing, acquisition, partnership, or other business transaction
- A startup investment term sheet may record the proposed investment amount, valuation, securities to be issued, ownership or dilution, investor rights, conditions precedent, governance arrangements, founder obligations, exit provisions, and other material commercial terms before the parties proceed to definitive transaction documents
Who needs it? / When is it needed?
- Startups, founders, companies, angel investors, venture capital investors, strategic investors, lenders, business partners, and parties negotiating a proposed investment or commercial transaction
- The service is particularly useful at the initial stage of a transaction when parties have reached broad commercial understanding but need to document the principal terms for negotiation, due diligence, approvals, and preparation of definitive agreements
What to expect from the WCP Professionals
WCP professionals support you with:
- Review of the proposed transaction, parties, business structure, investment amount, valuation, securities, ownership implications, investor rights, governance requirements, conditions precedent, exit mechanisms, confidentiality requirements, and other negotiated terms
- Identification of legal and commercial issues
- Preparation or review of the Term Sheet
- Clarification of binding and non-binding provisions
- Alignment with the proposed transaction structure
- Assistance with revisions and negotiation of key terms.
Key deliverables
Deliverables cover:
- Draft or reviewed Term Sheet
- Transaction overview
- Investment amount and proposed valuation
- Security and subscription terms
- Proposed ownership and dilution
- Investor rights and protections
- Founder and management obligations
- Governance and control provisions
- Conditions precedent
- Proposed use of funds where applicable
- Liquidation preference and exit provisions where applicable
- Confidentiality and exclusivity provisions
- Representations or undertakings where appropriate
- Governing law and dispute-resolution provisions
- Identification of provisions intended to be legally binding.
Standard turnaround time
- Initial drafting or review may generally be completed within an agreed professional timeline after receiving the proposed transaction details and commercial terms.
- The timeline depends on the complexity of the transaction, number of parties and investors, type of securities, valuation and ownership arrangements, investor rights, regulatory considerations, and number of negotiation or revision rounds required.
Government fees, timelines & key outcomes
- No standard government fee is ordinarily applicable merely for preparing or reviewing a Term Sheet.
- Government filing fees, stamp duty, valuation costs, professional charges, or other statutory expenses may arise later when the agreed terms are implemented through definitive agreements, share issuance, registration, or other transaction steps.
- Where the transaction involves issuance of securities, the Companies Act, 2013 and applicable rules may impose statutory requirements on the subsequent transaction, including private-placement or allotment requirements where applicable.
- Key outcomes include documented commercial understanding between the parties, identification of unresolved negotiation points, and a structured basis for preparing definitive transaction documents.
Forms & filings involved
- A Term Sheet itself generally does not require a statutory government filing.
- Depending on the transaction, subsequent implementation may require board and shareholder approvals, private-placement documentation, securities allotment filings, valuation documentation, regulatory applications, or other corporate filings.
- The Ministry of Corporate Affairs provides the applicable statutory filing framework for company transactions through its MCA portal and prescribed forms.
Documents required
- Company incorporation documents
- Memorandum and Articles of Association
- Current shareholding and cap table
- Founder and investor details
- Proposed investment amount
- Valuation information
- Proposed securities and ownership structure
- Existing shareholders' or investment agreements
- Financial projections
- Business plan or pitch deck where relevant
- Proposed investor rights
- Previous funding documents
- Any regulatory or commercial information relevant to the transaction
What we need from you
- Complete details of the parties, nature and purpose of the transaction, proposed investment or consideration, valuation, securities to be issued or transferred, proposed ownership after the transaction, investor or counterparty rights, governance arrangements, funding requirements, conditions precedent, proposed timeline, exit expectations, exclusivity requirements, confidentiality requirements, and any commercial terms already agreed between the parties.
- Any existing draft, email discussion, pitch deck, or written proposal containing agreed commercial terms should also be provided.
Important conditions
- A Term Sheet is generally intended to record the principal terms of a proposed transaction and is not automatically a fully binding agreement merely because it has been signed.
- The legal effect depends on its wording, the intention of the parties, applicable law, and the specific provisions included.
- Parties may expressly identify certain clauses, such as confidentiality, exclusivity, costs, governing law, or dispute resolution, as binding while leaving the broader commercial transaction subject to execution of definitive agreements.
- Where the proposed transaction involves issuance or transfer of securities, the final structure must comply with the Companies Act, 2013, applicable rules, the company's constitutional documents, and any applicable sectoral or regulatory requirements.
Additional information
- A Term Sheet is normally an early-stage transaction document and may subsequently be followed by definitive agreements such as a Share Subscription Agreement, Shareholders' Agreement, Share Purchase Agreement, investment agreement, loan agreement, or other transaction documentation depending on the structure.
- The Term Sheet should therefore be drafted with sufficient clarity to prevent ambiguity regarding valuation, securities, ownership, investor rights, conditions precedent, governance, exit arrangements, and provisions intended to be binding.
- Where the proposed transaction involves foreign investment, regulated sectors, complex securities, or significant ownership changes, additional regulatory and compliance requirements may apply.
- The final transaction documents should accurately reflect the agreed Term Sheet while ensuring that all required corporate approvals and statutory filings are completed.
The estimated cost covers indicative professional fees only. Government fees, stamp duty and taxes are payable at actuals.
How it works
- 1. Raise a service enquiry describing your requirement.
- 2. A Relationship Manager reviews it and opens it for bidding.
- 3. Pay into escrow and assign the professional you select.
- 4. Track progress to completion, then accept and release payment.
Frequently asked questions
Is a term sheet binding?
Mostly not, except clauses such as confidentiality, exclusivity and governing law.
What is a liquidation preference?
The investor's right to get their money back, or a multiple, before others on a sale or liquidation.
What is anti-dilution protection?
A mechanism that adjusts the investor's price if shares are later issued at a lower valuation.
What should founders watch in a term sheet?
Valuation, vesting, board control, veto rights, liquidation preference and exclusivity.