Document background
The Startup Investment Term Sheet is a crucial preliminary document used in the Netherlands when a startup company is seeking to raise capital from investors. It outlines the proposed terms of the investment, including valuation, investment amount, share rights, governance structure, and key investor protections. This document serves as a roadmap for the transaction and forms the basis for the preparation of definitive investment agreements. While mostly non-binding (except for specific provisions), it reflects serious intent from both parties and typically indicates commitment to proceed with the investment subject to due diligence and final documentation. The term sheet must comply with Dutch corporate law and investment regulations, particularly the Dutch Civil Code (Burgerlijk Wetboek) and financial supervision requirements. It's typically used during Series A or later funding rounds, though can also be adapted for seed rounds with institutional investors.
