Investment heads of terms

For use by a company when agreeing a basic set of heads of terms with investors.

About this document:

  • This is a basic set of heads of terms intended to be issued by a company seeking investment to its proposed investors. Heads of terms are also sometimes referred to as “term sheets”.
  • The heads of terms normally set out the indicative terms on which the company is prepared to accept investment, with the terms to be formally documented in the investment agreement and articles of association of the company at a later stage. So the heads of terms are not legally binding unless there is specific wording to say that they are.
  • While using heads of terms can tend to “front-load” the costs of a transaction if lawyers are involved at this stage, they can be a useful tool to flush out any deal breakers at an early stage of the investment process.
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