What Is a Term Sheet?

A term sheet is a non binding document with a set of terms for negotiation on it. It is typically given by a venture capital firm or an angel to a company, and those are the terms at which they are going to offer to invest in the company. Once you get your first term sheet, then that drives a phomo from other investors who are considering potential investing. They have to make a decision about whether they are also going to get you term sheet. Antifically, that is why the first one can cascades the process.