Easy to Use Legal Templates

Quickly and easily create any legal agreement for you or your team.

Affordable Plans

Straightforward pricing plans and bespoke packages built to simplify all your legal demands.

Vast Document Library

Zegal’s comprehensive collection of agreements means you always have what you need at your fingertips.

What is Zegal?

Watch to see how Zegal can help your business create, negotiate, and sign legal documents and contracts.

What is an Ordinary Shares Investment Term Sheet Template?

An Ordinary Shares Investment Term Sheet is a preliminary, non-binding document that outlines the key terms and conditions of a potential investment between a company and investors, specifically for the issuance of ordinary shares.

Create Now

Why choose Zegal?

With Zegal, you can reduce legal risks and improve the efficiency of your contract workflow, allowing you to focus on your core business operations.

Our platform is flexible, scalable, and tailored to the needs of your business.

What is an Ordinary Shares Investment Term Sheet?

An Ordinary Shares Investment Term Sheet is a foundational document that outlines the key terms agreed upon between a company seeking investment and potential investors to issue new ordinary shares. 

An Ordinary Shares Investment Term Sheet is a non-binding document that serves as a preliminary agreement to facilitate discussion and negotiation, setting the stage for more formal, legally binding documents to follow.

Why use an Ordinary Shares Investment Term Sheet?

The term sheet plays a crucial role in investment deals by clearly summarising the significant aspects of the potential investment agreement. Its primary functions include:

  • Ensuring mutual understanding and agreement on significant deal points between the company and investors.
  • Reducing the likelihood of misunderstandings or disputes.
  • Minimising premature legal expenses by outlining the deal’s framework before drafting binding agreements.

Key components of an Ordinary Shares Investment Term Sheet

A comprehensive term sheet should include:

  • Company Information: A brief overview of the company.
  • Founder Details: Identification of the company’s founders.
  • Investment Amount: The proposed investment figure and investor commitments.
  • Company Valuation: Pre-money valuation of the company.
  • Share Details: Information on the new shares to be issued, such as the number, class, type (equity or preference), stake percentage, and voting rights.
  • Subscription Price: Price per share for the new issue.
  • Timeline: Estimated date of investment completion.
  • Capitalisation Tables: Pre and post-money valuation charts.
  • Investor Rights: Rights being granted to the investors.
  • Founder Obligations: Duties and responsibilities of the founders.
  • Employee Share Option Plan: Details on whether a share option plan for employees will be established.
  • Board Representation: Information on whether investors can nominate board directors.
  • Reserved Matters: Topics requiring board or shareholder approval.
  • Confidentiality and Exclusivity: Terms concerning the privacy of discussions and any exclusive negotiation rights. Consider a Non-Disclosure Agreement to secure confidentiality.

Is an Ordinary Shares Investment Term Sheet legally binding?

While the term sheet itself is not legally binding, except for confidentiality and exclusivity clauses, it sets the tone for honour-based negotiations. A more detailed Ordinary Shares Investment Agreement will later formalise the binding terms of the investment.

Next steps after signing an Ordinary Shares Investment Term Sheet

Following the term sheet’s signing, the investors typically conduct due diligence. The outcomes of this process led to the finalisation of the investment deal, including drafting the Ordinary Shares Investment Agreement and a Shareholders Agreement to detail new share issuance, shareholder rights, and other pertinent matters.

Who prepares the Term Sheet?

Typically, the investor prepares the term sheet to outline their proposed investment terms. It marks the beginning of formal negotiations towards an investment deal.

For further information on creating secure and comprehensive employment agreements for your team members, consider exploring an Employment Contract. Additionally, a Memorandum of Understanding could provide a structured yet flexible framework to outline the collaboration’s intent for partnerships or collaborative projects initiated as part of the investment process.

Ordinary Shares Investment Term Sheet Template

An Ordinary Shares Investment Term Sheet is an essential initial capital-raising document. It lays the groundwork for negotiations, ensuring that the company’s founders and potential investors have a clear, agreed-upon basis for formalising the investment.

Create one now in minutes with Zegal.

Stay compliant with the Zegal template library

Zegal legal template are meticulously crafted with the precision of AI and the expertise of seasoned human lawyers, providing a unique blend of speed and reliability.

You can trust that Zegal agreements are legally sound and fully compliant with current regulations.

Whether you're a startupSME, or a larger enterprise, Zegal contract management will automate and speed up your legal processes.

Using Zegal will reduce risk, save money, and improve efficiency. Let us take care of the paperwork so you can focus on running your business.

Don’t compromise on speed or compliance. Stay secure, compliant, and efficient with Zegal.

Related Documents

If you're creating an Ordinary Shares Investment Term Sheet, you may also be interested in the following documents:

Nice things people say about Zegal.