Glossary

Term sheet

A term sheet is a non-binding document that is typically signed by a startup and an investor before signing an investment instrument (a convertible note, a SAFE, or an equity round).

Feb 8, 2025brenda-silbermanlazo

What is a term sheet?

A term sheet is a non-binding document that is typically signed by a startup and an investor before signing an investment instrument (a convertible note, a SAFE, or an equity round).

Investors will ask for this document to be signed to establish the investment’s terms and conditions, thereby facilitating the negotiation, signing, and execution of the investment document.

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Startup

A startup is an innovative company designed to grow exponentially and scale across multiple markets. In its early stages, it will face considerable uncertainty about the ideal product and business model to support that growth and scalability.

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Accelerator and incubator

A business accelerator helps other companies grow in their early stages. An incubator, on the other hand, supports projects at the idea stage and helps them turn that idea into a product.

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Annual Recurring Revenue

Annual Recurring Revenue, or ARR, means annual recurring revenue. It is the total amount of predictable, recurring revenue a startup generates from its customers each year.