A term sheet is a document that outlines the key terms of an agreement between an investing party and a company seeking funding. Similar to a letter of intent or memorandum of understanding, a term sheet sets out the understanding and key principles of a deal. Unless stated otherwise in the document, a term sheet is non-binding.

The format of a term sheet is such that it contains all the points that the two parties, especially the investors, need to be aware of before spending on equity. It includes all required investment details, including issuer information, valuation terms, amount, and other information.