Home Blog Term Sheet Review: Key Components, Review Steps, Lawyer Help

Term Sheet Review: Key Components, Review Steps, Lawyer Help

Jump to Section

Quick Facts — Terms Sheet Lawyers

What is a Term Sheet Review and How is it Done?

A term sheet is a non-binding document that lists the terms and conditions of an investment or other business agreement between parties.

It can be described as an outline or summary for future legally-binding documents to be drafted. Since it lays the foundation for those, you should review it closely before you agree to its terms.

Read the rest of this article to explore what’s typically included in a term sheet, how you can review it yourself, and when you should consult with a qualified lawyer for a thorough legal review.

What Information is Included in a Term Sheet Review?

A term sheet usually includes information about the investor’s intentions and key terms of the investment, such as:

  • Purpose. This explains the reason for the investment and the parties’ goals, while mentioning all legal parties who are involved in it.
  • Investment amounts. These describe the total amount of money the investor is putting into the company. It specifies payment terms, such as if the money will be paid in one lump sum or via installments.
  • Company valuation. This refers to how much the company is worth, as this determines investor percentages. Such sections in the document provide transparency for the investor.
  • Financial rights on exit. This defines how proceeds will be transferred, such as in the case of selling the company.
  • Dividends. This section of the term sheet explains how and when investors will receive profits.
  • Control. The document should outline the company’s board of directors and what rights to seats investors have.
  • Covenants. In this section, you’ll read through a range of activities that the parties aren’t allowed to do during signing and closing the transfer. It needs to be clear to prevent disputes.
  • Confidentiality. The addition of this term means that both parties need to agree to keep the business agreement private.

How Do You Review a Term Sheet?

Reviewing a term sheet is possible, but there are some important things to look for. Here’s a rundown of some.

Compare it to the Letter of Intent

When reviewing your term sheet, it’s good practice to check it across other business documents, such as a letter of intent.

A letter of intent is a non legally-binding document that describes basic terms of the transaction. These should be aligned with what’s included in the term sheet for consistency.

Validate the Seller’s Promises

You should check that the seller is providing truthful information about the company’s finances, including its debt and liabilities. This due diligence makes the transfer more favorable while protecting your interests.

Check the Financial Terms

Every term sheet contains a form of capital, such as common equity. It’s important to review this and its pros and cons. It will help you to confirm that you know your rights and understand what risks are involved.

Consider No-Shop Provisions

The seller must agree not to let other investors get access to the deal for a specific amount of time, usually 30 or so days. Check that these provisions are fair and reasonable.

Look at the Closing Provisions

The term sheet should include information about what conditions need to be met before the deal can close. These should be scrutinized closely. Remember to check for any post-closing conditions, such as indemnification claims.

Do You Need a Lawyer for a Term Sheet Review?

It’s advisable to hire a lawyer to review your term sheet review. This is because term sheets can be complex and filled with technical or legal language, while also containing some legally-binding clauses.

You want to ensure you understand everything in the document, which a lawyer can easily help you with.

During a legal review, a lawyer can help you in various ways, such as by:

  • Checking that all the agreement’s terms are compliant with relevant laws and clarifying all legal clauses so that there are no hidden risks.
  • Noting provisions or terms that could be limiting, such as by reducing your level of control.
  • Clarifying confusing or vague wording in the contract that can cause issues or disputes. This also ensures that all clauses in the agreement are consistent.
  • Checking that the document is consistent with other documents in the company.
  • Negotiating with the other party for favorable or revised terms.
  • Protecting your rights, such as in terms of exit options.
  • Helping you with drafting the binding agreements that follow, ensuring that everything is clear, reasonable, and legally sound.

Where to Find a Lawyer for a Term Sheet Review

If you want to work with a qualified, professional lawyer to review your term sheet, you don’t have to worry about where to find one. There are online legal platforms that make the process of seeking legal guidance much easier, without you having to leave your home.

ContractsCounsel is one of the biggest online legal marketplaces that connects clients with experienced lawyers who have been vetted on the platform. All lawyers have the skills and years of experience in helping clients with the drafting and review of your term sheet as well as other, legally binding, documents.

When you want to request a legal review of your term sheet, here are the easy steps to follow.

1. Visit the ContractsCounsel marketplace and post your project for free.

2. You should include some details of your project so lawyers know what you require.

3. You’ll receive multiple lawyer bids from lawyers on the platform.

4. You’ll review the lawyers' profiles based on data provided on the platform, such as their location, years of experience, expertise, and client ratings.

5. Select the best lawyer according to your legal requirements. Hire them for the work.


ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.


Meet some of our Lawyers

Alexander N. on ContractsCounsel
View Alexander
5.0 (64)
Member Since:
June 17, 2024

Alexander N.

Founder
Free Consultation
Los Angeles, California
10 Yrs Experience
Licensed in CA
University of Southern California Gould School of Law

Having overseen over $1.2 billion in transaction value, we are able to provide top-tier service at affordable rates, with much more personalized attention and fast turnarounds. After working for a AM Law Top 100 firm, I started my own firm and have been lucky enough to represent numerous conglomerates (FOX, Endeavor, etc.), promising startups, small businesses and private individuals. Our areas of expertise - Business Formations and Operating Agreements; Capital Raises and Debt Financing; Commercial Transactions; M&A; Real Estate; Intellectual Property; Employment and Hiring; Outside General Counsel; Corporate Agreements and Governance; Litigation and Dispute Resolution. We have been featured in The Wall Street Journal, Marketwatch, Yahoo Finance, Variety, Business Insider, Los Angeles Magazine, the LA Times, and others. We are driven by an unwavering commitment to our clients, going above and beyond to deliver results.

Recent  ContractsCounsel Client  Review:
5.0

"This group was incredibly responsive and informative every step of the way."

Phocus L. on ContractsCounsel
View Phocus
5.0 (1)
Member Since:
September 16, 2021

Phocus L.

Attorney
Free Consultation
Phoenix, AZ, USA
15 Yrs Experience
Licensed in AZ, CA
Georgetown University Law Center

G'day, my name is Michele! I work with startups, entrepreneurs and small/medium-sized businesses across the country in a wide array of industries. I help them with all of their ongoing, daily legal needs. This includes entity formation, M&A, contract drafting and review, employment, asset sale & acquisition, and business sales or shareholder exits. I'm half-Australian, half-Italian, and I've lived the last 20+ years of my life in America. I've lived all over the USA, completing high school in the deep south, graduating cum laude from Washington University in St. Louis, and then cum laude from Georgetown University Law Center. After law school I worked for the Los Angeles office of Latham & Watkins, LLP. After four intense and rewarding years there, I left to become General Counsel and VP of an incredible, industry-changing start-up called Urban Mining Company (UMC) that manufactures rare earth permanent magnets. I now work for Phocus Law where I help run our practice focused on entrepreneurs, startups, and SMEs. I love what I do, and I'd love to be of help! My focus is on providing stress-free, enjoyable, and high-quality legal service to all of my clients. Being a good lawyer isn't enough: the client experience should also be great. But work isn't everything, and I love my free time. I've been an avid traveler since my parents put me on a plane to Italy at 9-months old. I'm also a music nut, and am still looking for that perfect client that will engage me to explain why Dark Side Of The Moon is the greatest album of all time. Having grown up in a remote, and gorgeous corner of Australia, I feel a strong connection to nature, and love being in the elements.

Benjamin W. on ContractsCounsel
View Benjamin
5.0 (32)
Member Since:
March 11, 2021

Benjamin W.

Founder
Free Consultation
Los Angeles, CA
11 Yrs Experience
Licensed in CA
UCLA School of Law

I am a California-barred attorney specializing in business contracting needs. My areas of expertise include contract law, corporate formation, employment law, including independent contractor compliance, regulatory compliance and licensing, and general corporate law. I truly enjoy getting to know my clients, whether they are big businesses, small start-ups looking to launch, or individuals needing legal guidance. Some of my recent projects include: -drafting business purchase and sale agreements -drafting independent contractor agreements -creating influencer agreements -creating compliance policies and procedures for businesses in highly regulated industries -drafting service contracts -advising on CA legality of hiring gig workers including effects of Prop 22 and AB5 -forming LLCs -drafting terms of service and privacy policies -reviewing employment contracts I received my JD from UCLA School of Law and have been practicing for over five years in this area. I’m an avid reader and writer and believe those skills have served me well in my practice. I also complete continuing education courses regularly to ensure I am up-to-date on best practices for my clients. I pride myself on providing useful and accurate legal advice without complex and confusing jargon. I look forward to learning about your specific needs and helping you to accomplish your goals. Please reach out to learn more about my process and see if we are a good fit!

Recent  ContractsCounsel Client  Review:
5.0

"Benjamin was a great communicator. He understood that I was looking to negotiate, not litigate. Very happy with the work. Hiring him for a second project now."

Daniel K. on ContractsCounsel
View Daniel
5.0 (12)
Member Since:
October 11, 2023

Daniel K.

Managing Partner
Free Consultation
Los Angeles, California
16 Yrs Experience
Licensed in CA
UC Berkeley School of Law

I graduated from Yale University magna cum laude, served as a Fulbright Scholar in Italy and attended UC Berkeley School of Law. In 2023, I was named a "Legal Visionary" by the Los Angeles Times. I have broad experience in corporate transactions and in serving as outside general counsel to clients. I started my legal career in Silicon Valley and Hong Kong working on large equity and debt financings and matters for private wealth clients. After returning home to Los Angeles, I advised startup companies with formations, acquisitions and day-to-day matters such as sales contracts and licensing. More recently, I have focused on data, IT and SaaS contracts for both providers and customers. My clients include NASDAQ-listed companies, a top ranked children’s hospital and local startups.

Recent  ContractsCounsel Client  Review:
5.0

"Daniel assisted me with a project that had a relatively quick turnaround and provided thoughtful and thorough feedback. Highly recommend!"

Jessica G. on ContractsCounsel
View Jessica
Member Since:
October 10, 2023
James D. F. on ContractsCounsel
View James D.
Member Since:
October 12, 2023

James D. F.

innovative Counsel [iC]℠
Free Consultation
Sydney, Australia
13 Yrs Experience
Licensed in CA
Queensland University of Technology

Unique Hybrid Background ➲ Deep Legal, Tech & Commercial Experience More by pure chance than design, I arrived late in life to pursue a career in law. My background spans more than 3 decades across Information Technology, entrepreneurship & the legal profession supporting my claim to being a 'Deep Generalist'. What is a 'Deep Generalist'? 'The professionals who develop into really great client advisors are deep generalists.' Quote from Warren Bennis. From 2013 I worked for established boutique property, finance & commercial law firms + an award-winning #newlaw firm of senior lawyers (formerly Nexus Law Group, now merged with Arch.law) before founding my digital law firm Blue Ocean Law Group in 2017. I also worked part-time for 2 years as a freelance online expert across all aspects of Australian Law with JustAnswer (H.Q. in San Francisco) and volunteered at the Caxton Legal Centre to give back to the community. Now I offer pro bono (free) legal assistance at my discretion. My achievements in the law are best reflected in the high number of settlements where civil litigation has been avoided, court judgements (incl. successful appeals) in my clients' favour & [90+] testimonials which can be seen on the blueocean.law [700+] page website which offers tons [585+] of both free & paid innovative legal products & resources. My personal experience as a client on the other side of legal matters affords me a unique perspective and goes some way to explaining my passion for the reinvention of the delivery of legal services. I am an early adopter of technology + gadgets, an avid reader and an animal lover. In January 2023, I joined the IAPP – International Association of Privacy Professionals and became a Certified Information Privacy Professional – United States by gaining the highly valued gold-standard ANSI-Accredited CIPP/US credential. I followed this up in August 2023, by obtaining the Certified in CyberSecurity qualification form ISC(2). Pre-Law Background From 1992 to 2002, I worked for Accenture as an IT Project Manager across APAC (including long-term project assignments in New Zealand & Singapore). I started a small business side hustle in 1997 and in 2003 I left Accenture to become a full-time entrepreneur in the transport industry. I later expanded into the mezzanine property development finance market as well as venturing into small-scale property development.Unique Hybrid Background

Kchris G. on ContractsCounsel
View Kchris
Member Since:
October 15, 2023

Kchris G.

Associate Attorney
Free Consultation
Norman, Oklahoma
6 Yrs Experience
Licensed in OK
Oklahoma City University School of Law

My name is Kchris Griffin. I am an licensed attorney practicing Family and Civil Law in Oklahoma. My goal is to help those in need with receiving efficient and effective legal services.

Find the best lawyer for your project

Browse Lawyers Now

See Real Term Sheet Projects

New York Operating Agreement and Term Sheet Drafting
  • New York
  • 7 lawyer bids
  • $750 - $2,500
View Details
Oklahoma Term Sheet Drafting
  • Oklahoma
  • 6 lawyer bids
  • $1 - $3,499
View Details
California Term Sheet Review for Creator Company Review
  • California
  • 3 lawyer bids
  • $295 - $1,000
View Details
Arizona Term sheet Drafting
  • Arizona
  • 10 lawyer bids
  • $249 - $1,700
View Details
Georgia INKZUP TERM SHEET REVIEW Review
  • Georgia
  • 9 lawyer bids
  • $200 - $1,500
View Details
North Carolina Real Estate Private Equity LLC startup term sheet investment Drafting
  • North Carolina
  • 7 lawyer bids
  • $350 - $1,000
View Details

See all Term Sheet projects

Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.

View Trustpilot Review

Need help with a Terms Sheet?

Create a free project posting
Clients Rate Lawyers 4.9 Stars
based on 20,497 reviews
CONTRACT LAWYERS BY TOP CITIES
See All Business Lawyers
TERM SHEET REVIEW LAWYERS BY CITY
See All Term Sheet Review Lawyers

Contracts Counsel was incredibly helpful and easy to use. I submitted a project for a lawyer's help within a day I had received over 6 proposals from qualified lawyers. I submitted a bid that works best for my business and we went forward with the project.

View Trustpilot Review

I never knew how difficult it was to obtain representation or a lawyer, and ContractsCounsel was EXACTLY the type of service I was hoping for when I was in a pinch. Working with their service was efficient, effective and made me feel in control. Thank you so much and should I ever need attorney services down the road, I'll certainly be a repeat customer.

View Trustpilot Review

I got 5 bids within 24h of posting my project. I choose the person who provided the most detailed and relevant intro letter, highlighting their experience relevant to my project. I am very satisfied with the outcome and quality of the two agreements that were produced, they actually far exceed my expectations.

View Trustpilot Review

Need help with a Terms Sheet?

Create a free project posting
Clients Rate Lawyers 4.9 Stars
based on 20,497 reviews

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call

Find lawyers and attorneys by city