Term Sheet: A Term Sheet is customarily presented by an investor to a company seeking capital as a non-binding outline of the structure of the proposed investment. It typically contains basic deal terms, but not the details.There are some elements of a term sheet that are typically binding. Frequently, there is a no shop provision that prevents the company from showing the term sheet to other candidate investors.
Once a term sheet is executed, the parties typically act as if it were binding. They all work toward closing a deal that looks and feels like the deal they'd agreed to complete in principle.
During this final stage of funding, the investor's diligence efforts will continue. As a result, material changes to the deal may be required. Such changes should not be presumed to be malicious on the part of the investors.
