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 simple, non-legally binding document that records the major terms of negotiation between a company and investors for the issue of new 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.

Ordinary Shares Investment Sheet

What is an Ordinary Shares Investment Term Sheet?

An Ordinary Shares Investment Term Sheet is a simple, non-legally binding document that records the major terms of negotiation between a company and investors for the issue of new ordinary shares.

An Ordinary Shares Investment Term Sheet is a record of discussions between the founders of a business and an investor for potential investment by ordinary shares.

Creating an Ordinary Shares Investment Term Sheet helps facilitate discussion between the company and its investors in the negotiation stage.

Why is a term sheet used in an investment deal?

A term sheet is used to record the significant aspects of a deal. This is an overview without the details of every minor possibility that are in a binding contract. The term sheet generally ensures that the parties in a business transaction agree on most major aspects. Additionally, it reduces the likelihood of a misunderstanding or unnecessary dispute. Finally, investment deal ensures that neither party will incur premature expensive legal charges for drawing up a binding agreement or contract. In cases of an investment deal, you can use an ordinary shares investment term sheet to do all the things above in relation to the investment in the company by the investors.

What should be included in an Ordinary Shares Investment Term Sheet?

These are the basic things included in a Term Sheet (Ordinary Shares). ie;

  • Basic information about the company;
  • Identity of the founders;
  • Proposed investment amount and investors commitment
  • The pre-money valuation of the company
  • Details of new shares to be issued to investors (number and classes of shares, type of shares like equity or preference, percentage stake, voting rights, dilutive/non-dilutive, etc.)
  • The subscription price for new shares;
  • Estimated completion date;
  • Pre-money and post-money capitalization tables
  • Investors’ rights;
  • Obligations on the founders;
  • Whether or not the company will set up a share option pool for its employees (employee share option plan);
  • Board representatives – whether investors can nominate directors on the board (investors directors)
  • Reserved matters that require approval of the board;
  • Reserved matters that require majority consent of the shareholders;
  • Important matters that the shareholder’s agreement will contain such as drag along and tag along rights, founders share vesting, right to buy back, etc.;
  • Confidentiality of the terms discussed; and
  • Whether or not the discussion will be exclusive, and if so, how long is the exclusivity period?

Is a term sheet legally binding?

A term sheet is not legally binding except for confidentiality and exclusivity obligations (if applicable). This is why a definitive agreement in the form of “Ordinary Shares Investment Agreement” comes into play, later on, to agree on the binding terms. However, it is usually binding in honor. This makes it difficult for either side to renegotiate other than in exceptional circumstances. For example, if the investor’s due diligence uncovers something which changes the basis upon which the investor is willing to invest in the company. This is the reason why you should have a lawyer review a term sheet. Then they can advise on its implications before signatures.

How to prepare a term sheet?

The task of preparing a term sheet is more of a collective effort. When you know how to prepare a term sheet, you will know first-hand about everything included in it and so, understand it better.

The first step is to identify the Term Sheet Agreement’s purpose. Be clear about what it is for and the date it is to be completed. Next, briefly summarize the principal terms and conditions and mention if it is binding or non-binding along with the details of the buyer/s.

Following this, list the offering terms including conditions to close, date, offered amount, investors involved, securities as well as pre-money valuation. Be sure to include dividends, liquidation preferences, and all other provisions. The protection of the investors is equally important and so identify the participation rights. Next, form a Board of Directors and end it with a voting agreement along with other matters.


An Ordinary Shares Investment Term Sheet is a kick-off document for any investor or a company/its founders. Essentially, it negotiates the terms of an investment when raising capital. Also, it outlines the preliminary roadmap of the deal on the basis of which a definitive agreement is entered later on. In essence, both bounders and investors find this document useful for understanding and recording their proposed deal.

You Might Also Like

Along with this document, make sure you see these other templates in our library:

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.