Entrepreneurs seeking money often sign a "Term Sheet" with potential investors. These term sheets, as James Cai explains, are used to negotiate the terms of the investment in the entrepreneur's startup. These term sheets, although not an enforceable commitment by themselves, contain many terms which serve as something of a baseline for the investors' ultimate capital infusion into the fledgling company.
In this article, Mr. Cai comments on many provisions commonly included in term sheets, and explains the impact they can have on a growing startup (and an entrepreneur, personally).
- Summary by FizzLaw Team
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The Terms of a Term Sheet