Raising money
Term sheet
A term sheet is a short document listing the main terms of a proposed investment: how much money, at what valuation, and what rights each side gets.
Also called termsheet
Looking this up for a class, a job, or something you want to build? If it is the last one, nommi reads your idea before you spend months on it.
Most of it is not legally binding until the final documents are signed, though clauses like confidentiality usually are. Every line still has real effects later, from who controls the board to who gets paid first in a sale.
This is not legal or tax advice, check with a lawyer or accountant.
What recent Cooley data says
Most deals use the simplest terms: in the 166 venture financings Cooley handled from April to June 2026, 95.8% had a 1x liquidation preference (investors get back what they put in before others are paid) and 96.4% had non-participating preferred stock (investors take that money or their share of the sale, not both).
- Deals with a 1x liquidation preference, April to June 2026: 95.8%.
- Deals with non-participating preferred stock, April to June 2026: 96.4%.
Source: Cooley, Venture Financing Report Q2 2026. 166 financings Cooley handled, not the whole market. As of 5 November 2026.
When this shows up
Example, not a real founder: you receive your first term sheet and focus on the valuation line. A clause near the end gives the investor a veto over future fundraising. You only notice it when you try to raise again.
What to do next
Read every clause and write one plain sentence beside each, saying what it lets the investor do. Mark any line you cannot explain and ask your lawyer about those first.
Go deeper
Participating preferred with a 1x cap, and what it costs you
Each clause it finds explained in plain words, with the ones that may be worth raising with a lawyer pointed out.
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