Startup Term Sheet

I. Overview

This Term Sheet outlines the principal terms and conditions proposed for an investment in [Your Company Name], a company founded by [Your Name]. This Term Sheet serves as a basis for further negotiations and is intended to facilitate a potential funding agreement between [Your Company Name] and the investor, [Investor's Name].

This document is non-binding and is intended for discussion and negotiation purposes only. Final terms will be outlined in a definitive agreement upon successful negotiations and due diligence procedures.

II. Basic Terms of the Investment

The following are the basic terms under which the investor is prepared to invest in [Your Company Name]:

• Type of Security: Preferred Stock / Convertible Note / SAFE (Simple Agreement for Future Equity)

• Amount of Investment: [Amount]

• Pre-Money Valuation: [Valuation]

• Price per Share: [Price]

III. Conditions Precedent to Financing

Completion of the investment is subject to satisfactory completion of financial, legal, and market due diligence by [Investor's Name]. Additionally, the investment is contingent upon the negotiation and execution of definitive agreements that accurately reflect the terms presented in this Term Sheet and other conditions as deemed necessary:

• Legal and Financial Audits

• Approval from both parties’ Boards of Directors

• Compliance with applicable laws and regulations

IV. Investor's Rights

Upon completion of the investment, [Investor's Name] will be entitled to certain rights including but not limited to:

• Board Representation: One seat on the Board of Directors of [Your Company Name]

• Voting Rights: As per the shareholding pattern post-investment

• Information Rights: Regular updates from [Your Company Name] regarding financial performance, strategic decisions, and other significant developments

V. Use of Proceeds

The funds raised through this investment will be utilized by [Your Company Name] primarily for the following purposes:

• Product Development and Enhancement

• Marketing and Sales Expansion

• Operational Costs and Working Capital

• Strategic Acquisitions or Partnerships

VI. Exclusivity and Confidentiality

Both parties agree to enter into an exclusivity period lasting [Number] days during which [Your Company Name] will not engage in discussions or solicit offers regarding investments from other parties. This term sheet and related negotiations should be treated as confidential and not disclosed to third parties without express consent from both [Your Company Name] and [Investor's Name].

Breaking confidentiality or the terms of exclusivity without prior written consent from either party may result in the termination of negotiations and possible legal action.

VII. Legal and Miscellaneous

This Term Sheet is governed by the laws of [Jurisdiction], and any disputes arising from it will be resolved in the courts of [Jurisdiction]. It is understood that this Term Sheet does not constitute a legal obligation until a definitive agreement has been executed by all parties. This Term Sheet expires on [Date] unless extended mutually by both parties in writing.

• Amendment and Waiver: Any amendments or waivers to this Term Sheet must be made in writing and signed by both parties.

• Assignment: Neither party may assign or transfer any rights or obligations under this Term Sheet without prior written consent from the other party.

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