Term Sheet

A term sheet is a non-binding document that outlines the fundamental terms and conditions under which an investment will be made. It acts as a blueprint for the final legal agreement and serves to ensure that both the entrepreneur and the investors are in agreement on key aspects of the deal before significant legal expenses are incurred.

In the context of fundraising for startups, such as Daytona's recent $2 million Pre-Seed round, a term sheet typically includes details such as the total amount of the investment, valuation of the company, percentage of equity being offered, investor rights, board structure, and any special conditions or warranties. The primary purpose of the term sheet is to lay a clear foundation for the eventual creation of a formal contractual agreement, ensuring a mutual understanding and preliminary consent on all significant aspects of the investment.