Term Sheet - Seed Investment

A Term Sheet Seed Investment document establishes the general terms of an investor joining your business.

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Last updated February 3, 2025

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Suitable for Australia

Term Sheet - Seed Investment

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What is a term sheet - seed investment?

A term sheet - seed investment is a document that outlines the main terms and conditions under which an investor will join your business during a seed funding round.
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When should you use a term sheet - seed investment?

Use this document when you are preparing for a seed investment round and want to set out the agreed terms with a potential investor before drafting full legal agreements.
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What should be in a term sheet - seed investment?

It should include details like investor identity, investment amount, share class, price per share, equity percentage, liquidation preference, anti-dilution, confidentiality, exclusivity, and a timetable for completing the full agreement.
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Frequently asked questions

What protections does this document offer to my startup?

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Are the terms in this document legally binding?

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What are the main limitations of using this term sheet?

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How does this document address due diligence?

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What happens if the deal does not proceed after signing?

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Does this document cover all Australian states and territories?

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What are the next steps after signing the term sheet?

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View Sample Term Sheet - Seed Investment

Term Sheet - Seed Investment
risk level indicator at Medium level

The Legal Risk Score of a Term Sheet - Seed Investment Template is Medium

Our legal team have marked this document as low risk considering:

  • The document allows the investor a period to conduct further due diligence and potentially withdraw from the transaction, which could leave the company in a position of uncertainty and potential loss of other opportunities during this period.
  • The exclusivity clause restricts the company from engaging with other potential investors or entertaining other proposals for a specified timeframe, which might limit the company's opportunities to secure possibly better or more immediate investments.
  • The costs clause specifies that the company bears all of the investor’s third-party expenses related to the transaction up to a certain limit, which could result in unforeseen financial burden on the company if these costs exceed initial estimates.

Assuming users have a basic understanding of such agreements, the risks are typical of investment negotiations and can be managed with careful planning and legal guidance.and risk as the efforts of both parties might not result in a secured contract.

Meet Our Users

Articles about Term Sheet - Seed Investment

Are You Investor Ready?
By Dominic Woolrych|Jul 26, 2015

Are You Investor Ready?

Raising money for seed funding is an exciting and stressful time. Read this article for some tips to make sure you're ready to make your big pitch.

What is a Term Sheet? (2025 Update)
By Dominic Woolrych|Jan 7, 2025

What is a Term Sheet? (2025 Update)

What is a Term Sheet and how can it help your business? Although not legally binding, term sheets have many benefits. Find out here.

What Legal Documents Do I Need to Raise Capital?: A Guide
By Ilyas Omari|Mar 20, 2023

What Legal Documents Do I Need to Raise Capital?: A Guide

Are you wondering what legal documents you need to raise capital? You can find out by reading this article.

Term Sheet Investor Checklist
By Dominic Woolrych|Aug 24, 2015

Term Sheet Investor Checklist

Learn the necessary terms that you need to check off in your term sheet and how it can beneficially protect both companies and investors from unwanted legal consequences both during and after the period of investment.

Term Sheet vs Memorandum of Understanding
By Cecilia Tran|Nov 21, 2025

Term Sheet vs Memorandum of Understanding

Looking to understand the difference between a term sheet and a memorandum of understanding?Read this article to find out what they are and when to use them.

5 Crucial Mistakes Early-Stage Businesses Make
By Dominic Woolrych|Jun 17, 2015

5 Crucial Mistakes Early-Stage Businesses Make

Read the 5 most crucial mistakes made by early-stage business and the best tips on how to avoid them.

Legal Documents Needed to Form a Partnership
By Zachary Swan|Nov 27, 2025

Legal Documents Needed to Form a Partnership

Partnering up? Find out what legal documents you need to form a partnership.

How to Raise Capital: The Essential Guide for Entrepreneurs
By Ilyas Omari|May 14, 2025

How to Raise Capital: The Essential Guide for Entrepreneurs

Do you want to learn how to raise capital as an entrepreneur? You can find out how to by reading this article.

5 Crucial Mistakes Early-Stage Businesses Make (2025 Update)
By Dominic Woolrych|May 15, 2025

5 Crucial Mistakes Early-Stage Businesses Make (2025 Update)

Starting a business isn't always smooth sailing. Find out the mistakes early-stage businesses make and how you can avoid them.

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