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Investment agreement term sheet
I need an investment agreement term sheet for a joint venture in the renewable energy sector, outlining initial capital contributions, profit-sharing ratios, and governance structure, with a focus on compliance with local regulations and a clear exit strategy for both parties.
What is an Investment agreement term sheet?
An Investment agreement term sheet lays out the key points and initial understanding between investors and companies seeking funding in Qatar. It's essentially a blueprint that captures the main commercial terms before drafting the full investment agreement, saving time and legal costs by getting everyone aligned early.
Under Qatar's Commercial Companies Law, these term sheets typically outline essential details like investment amount, company valuation, investor rights, and governance structure. While not legally binding (except for confidentiality clauses), they provide a clear roadmap for the final agreement and help avoid misunderstandings during negotiations with Qatari or international investors.
When should you use an Investment agreement term sheet?
Use an Investment agreement term sheet when you're ready to move from informal discussions to serious investment negotiations in Qatar. This document becomes essential once both parties have expressed genuine interest and need to outline key terms before spending time and money on full legal documentation.
The timing is particularly critical when dealing with foreign investors under Qatar's Foreign Investment Law, or when complex shareholding structures are involved. Having the term sheet ready before due diligence begins helps prevent misunderstandings about valuation, board rights, or exit provisions that could derail the deal later. It's especially valuable when multiple investors are involved or when seeking regulatory pre-approvals.
What are the different types of Investment agreement term sheet?
- Basic Equity Investment term sheets outline standard share purchase terms, voting rights, and exit provisions - commonly used for straightforward Qatari company investments
- Convertible Note term sheets detail debt-to-equity conversion terms and triggers - popular among Qatari tech startups
- Strategic Investment term sheets include specific industry partnership provisions and operational collaboration terms
- Venture Capital term sheets feature detailed protective provisions and anti-dilution rights - aligned with Qatar Financial Centre regulations
- Private Placement term sheets focus on regulatory compliance and sophisticated investor requirements under Qatar's securities laws
Who should typically use an Investment agreement term sheet?
- Company Founders/Management: Review and negotiate term sheets to ensure alignment with business goals and growth plans
- Venture Capital Firms: Draft and propose investment terms, often following Qatar Financial Centre guidelines
- Angel Investors: Review and negotiate term sheets for early-stage investments in Qatari startups
- Legal Counsel: Draft, review, and advise on term sheet provisions to protect client interests and ensure compliance
- Investment Banks: Structure deals and coordinate term sheet negotiations for larger transactions
- QFC Regulatory Authority: Oversee compliance with investment regulations and approve certain transaction terms
How do you write an Investment agreement term sheet?
- Company Information: Gather detailed business financials, ownership structure, and registration documents under Qatar law
- Investment Details: Define investment amount, valuation, and proposed shareholding structure
- Due Diligence: Complete preliminary company assessment and verify compliance with QFC regulations
- Key Terms: List major deal points including board rights, veto powers, and exit provisions
- Regulatory Requirements: Check foreign investment restrictions and necessary approvals
- Documentation: Our platform generates customized term sheets that ensure compliance with Qatar's legal framework
- Timeline: Establish clear milestones for negotiation, due diligence, and deal closing
What should be included in an Investment agreement term sheet?
- Party Information: Complete legal names and registration details of investor and company
- Investment Terms: Investment amount, valuation, and share class specifications
- Governance Rights: Board representation, voting rights, and major decision thresholds
- Anti-dilution: Protection mechanisms and future funding provisions
- Exit Rights: Tag-along, drag-along, and redemption provisions
- Confidentiality: Binding non-disclosure obligations under Qatar law
- Governing Law: Clear statement of Qatar or QFC jurisdiction
- Binding Provisions: Specify which terms are legally binding versus non-binding
- Timeline: Key dates for due diligence, documentation, and closing
What's the difference between an Investment agreement term sheet and an Investment Agreement?
An Investment agreement term sheet differs significantly from a full Investment Agreement in several key aspects under Qatar law. While both documents relate to investment transactions, they serve distinct purposes and carry different legal weights.
- Legal Binding Effect: Term sheets are largely non-binding (except for confidentiality provisions), while Investment Agreements are fully binding legal contracts
- Level of Detail: Term sheets outline key commercial points and basic structure, while Investment Agreements contain comprehensive legal provisions and detailed obligations
- Timing: Term sheets come first during negotiations to align parties on main terms, while Investment Agreements are executed after due diligence and final negotiations
- Documentation Length: Term sheets are typically 5-10 pages, while Investment Agreements can span 50+ pages with extensive exhibits
- Regulatory Requirements: Term sheets require minimal regulatory oversight, while Investment Agreements must fully comply with Qatar's Commercial Companies Law and QFC regulations
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