Term Sheet for Private Equity Cross-Border

---

I. Introduction

In entering into this Term Sheet, [Investor Name] ("Investor") and [Your Company Name] ("Company") agree to negotiate in good faith for the potential investment by the Investor into the Company. This Term Sheet outlines the preliminary terms and conditions of the proposed investment deal and serves as a framework for further discussions and negotiations between the parties. It is understood that this Term Sheet is not a legally binding document and does not constitute a commitment by either party to proceed with the transaction outlined herein.

II. Parties Involved

• [Your Company Name], a company organized and existing under the laws of [STATE/COUNTRY], with its principal office located at [Your Company Address]

• [INVESTOR'S NAME], an investor with an address at [INVESTOR'S ADDRESS].

III. Investment Structure

1. Investment Amount: The investor proposes to invest [Investment Amount] in the Company in exchange for an equity stake.

2. Valuation: The pre-money valuation of the Company is agreed to be [Valuation].

3. Investment Tranches: The investment will be structured in [Number of Tranches] tranches, with each tranche tied to specific milestones or performance metrics agreed upon by both parties.

4. Convertible Instruments: The investment may be structured as convertible preferred stock, convertible debt, or another mutually agreed-upon instrument.

IV. Governance and Management

1. Board Representation: The investor shall have the right to appoint [Number of Board Members] members to the Company's board of directors.

2. Voting Rights: The investor's voting rights shall be commensurate with its ownership stake in the Company.

3. Management Changes: In the event of a change in control of the Company, the Investor shall have the right to approve key management appointments.

V. Financial Terms

1. Liquidation Preference: In the event of a liquidation or sale of the Company, the Investor shall have a [Liquidation Preference Multiple] liquidation preference over common shareholders.

2. Dividend Policy: The company shall adopt a dividend policy that prioritizes reinvestment of profits into the business, subject to the Investor's approval.

3. Anti-Dilution Protection: The investor shall be granted anti-dilution protection in the event of future equity issuances at a lower valuation.

VI. Exit Strategy

1. Exit Timeline: Investor and Company shall work together to identify and pursue potential exit opportunities within [Exit Timeline] years of the investment.

2. IPO or Acquisition: The preferred exit strategy shall be either an initial public offering (IPO) or acquisition by a strategic buyer, subject to market conditions and the Investor's approval.

VII. Risk Factors

1. Market Risk: The company operates in a rapidly evolving industry with inherent market risks, including changing consumer preferences and regulatory uncertainty.

2. Execution Risk: The successful execution of the Company's business plan is subject to various operational, financial, and competitive risks.

VIII. Confidentiality and Exclusivity

Both parties agree to maintain the confidentiality of the terms and conditions outlined in this Term Sheet and to enter into a separate confidentiality agreement to protect sensitive information disclosed during the due diligence process. Furthermore, the Company agrees to grant the Investor a period of exclusivity to conduct due diligence and negotiate the definitive investment documents.

IX. Miscellaneous

A. Governing Law:

This Term Sheet shall be subject to, governed by, and construed by the laws of [Governing Law Jurisdiction].

B. Binding Agreement:

This Term Sheet constitutes the entire agreement between the parties concerning the subject matter hereof and supersedes all prior discussions, negotiations, and agreements, whether written or oral.

Term Sheet Templates @ Template.net