In the early days of a new co-venture or business partnership actually putting pen to paper and making the arrangement formal can seem lightyears away. We get that. But as your business grows and develops, it’s a good idea to formalize and make your business relationship legal.
One way of taking that next step is with a Term Sheet.
WHAT DOES IT COVER?
A Term Sheet is a non-binding, pre-contractual document which sets out the important terms and conditions of the proposed business relationship. It’s a bit more formal than a Memorandum of Understanding and serves as a guiding hand in final negotiations.
WHY IS THIS IMPORTANT?
If your start-up is ready to begin making deals for investment or you and your business partner are ready to divvy up shares in the company, a Term Sheet is a great jumping-off point. Getting down the main points of the agreement will make finalizing arrangements easier. It also shows your strong intent to enter into an agreement. Are you ready to make it official?