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A investment agreement term sheet outlines the key points of a potential investment deal between parties, serving as a roadmap for the final contract. It captures essential details like investment amount, company valuation, share rights, and key terms before lawyers draft the full agreement.

In the Australian market, term sheets help founders and investors get aligned on major deal points early. While not legally binding (except for confidentiality clauses), these documents follow standard practices under Australian corporate law and ASIC guidelines. They're especially important for startup funding rounds, helping both sides avoid costly misunderstandings down the track.

Use an investment agreement term sheet when you're ready to formalize investment discussions but aren't yet prepared for full legal documentation. It's particularly valuable during startup funding rounds, mergers and acquisitions, or when bringing strategic investors into established Australian companies.

This document becomes essential once initial verbal agreements are reached and both parties need to lock down key terms. Having it in place before engaging expensive legal services saves time and money. It's especially crucial when dealing with overseas investors, as it helps navigate FIRB requirements and ensures everyone understands the deal structure before proceeding to binding agreements.

• Standard Equity Investment: Basic term sheets for traditional equity investments, outlining share classes, valuation, and voting rights
• Convertible Note Term Sheet: Focuses on debt that converts to equity, including conversion triggers and valuation caps
• Strategic Investment: Includes additional provisions for corporate investors, like board seats and commercial agreements
• SAFE (Simple Agreement for Future Equity): Simplified term sheets popular with early-stage startups, following Y Combinator's model but adapted for Australian law
• Series Round: More complex term sheets for institutional investors, covering anti-dilution, pre-emptive rights, and exit provisions

• Startup Founders: Create and review term sheets when seeking investment, often with help from advisors
• Angel Investors: Individual investors who negotiate terms for early-stage investments, typically investing $50,000 to $500,000
• Venture Capital Firms: Professional investors who draft detailed term sheets for larger funding rounds, usually above $1 million
• Corporate Lawyers: Review and refine term sheets to ensure compliance with Australian securities laws and ASIC regulations
• Investment Advisors: Help negotiate and structure deals, particularly for complex transactions or international investments
• Company Directors: Review and approve term sheets as part of their governance responsibilities

• Company Details: Gather current cap table, shareholding structure, and recent company valuation
• Investment Terms: Define investment amount, share price, and type of securities being offered
• Key Rights: List voting rights, board seats, anti-dilution provisions, and any special investor privileges
• Due Diligence: Compile financial statements, business plans, and key contracts for investor review
• ASIC Compliance: Check current regulations on securities offerings and investor classifications
• Exit Strategy: Outline preferred exit mechanisms, tag-along rights, and drag-along provisions
• Documentation: Use our platform to generate a compliant term sheet that includes all essential elements

• Party Details: Full legal names and ABNs of the company and all investors
• Investment Structure: Precise details of investment amount, share price, and security type
• Valuation Terms: Pre-money valuation, share numbers, and capitalization table
• Investor Rights: Voting rights, board representation, and information access rights
• Key Protections: Anti-dilution provisions, pre-emptive rights, and tag-along rights
• Confidentiality: Binding confidentiality and exclusivity provisions
• Conditions: Due diligence requirements and key completion conditions
• Governing Law: Explicit statement of Australian jurisdiction and applicable state law

An investment agreement term sheet differs significantly from a full Investment Agreement in several key aspects. While both documents relate to investment transactions, they serve distinct purposes in the Australian business landscape.

• Legal Binding: Term sheets are largely non-binding (except for confidentiality clauses), while investment agreements are fully binding legal contracts
• Detail Level: Term sheets provide a high-level summary of key terms, while investment agreements contain comprehensive legal provisions and warranties
• Timing: Term sheets come first as negotiation tools, while investment agreements represent the final, executed deal
• Cost and Complexity: Term sheets are simpler and less expensive to prepare, making them ideal for initial discussions before committing to full legal documentation
• Purpose: Term sheets align parties on major points early, while investment agreements create enforceable legal obligations and protect all parties' rights