Document background
The Sweat Equity Term Sheet is a crucial document in the Swiss startup and business ecosystem, particularly utilized when companies wish to compensate service providers with equity instead of cash compensation. This arrangement is common in early-stage companies where cash resources are limited but growth potential is high. The document complies with Swiss corporate and securities laws, specifically addressing requirements under the Swiss Code of Obligations for share issuance and transfer. It typically precedes more detailed agreements and outlines key terms such as service scope, equity percentage, vesting conditions, and basic rights. The term sheet serves as a foundation for negotiation and subsequent documentation, ensuring all parties have a clear understanding of the proposed arrangement while maintaining flexibility for final agreement details.
