Term sheet

In accounting, term sheet means the short summary of a priced roundEquity & financingPriced roundA financing in which investors buy a new series of preferred stock at a stated price per share, on a negotiated pre-money valuation — as opposed to a SAFE or note, which defers the price. Converting SAFEs and notes convert at its close's economics and control terms — price, pre-money, pool, liquidation preferenceEquity & financingLiquidation preferenceA preferred stockholder's right to be paid a stated amount — usually 1× the original issue price plus declared but unpaid dividends — before common stockholders in a sale or liquidation. Non-participating preferred takes the greater of that or its as-converted share; participating preferred takes both, anti-dilution, board, protective provisionsEquity & financingProtective provisionsActions the company may not take without the consent of a set majority of the preferred — selling the company, changing the charter against the preferred, creating a senior class, changing authorized shares, paying dividends, changing the board's size, pro rata — that the definitive documents then implement.