The Classroom: Understanding the term sheet
Raising capital for a business is beset with a lot of issues—choosing from debt vs. equity financing to arriving at company valuation to negotiations. In such scenarios, it's important to have a full understanding of the terms which your investors throw at you—'term sheet' being the most commonly used. Simply put, a term sheet is a funding offer from a capital provider; it outlines the terms and conditions of an agreement. The key is to remember that it's just an offer—the entrepreneur can counter the offer and negotiate all the terms before finally accepting funds. Kruti Desai, Partner at ALMT legal takes through the basics of term sheet in n the second episode of this season of Classroom show.
Also see : The Classroom- Season 2- Episode 1- Understanding valuation of startups