1. What and Why
3. Quantum of fund
6. Exit Support
7. Protective/Participative Rights
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What is a term sheet ?
• A statement of intent setting forth the basic terms and
conditions under which a transaction will be effected
• Non-binding agreement
Why do we need a Term Sheet?
• It is an evidence of conclusion of various parameters of the
• It ensures that the parties are in agreement on the most crucial
aspects of the deal
• Forms the basis for developing more detailed legal documents
that are binding
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What is Valuation?
• It is the estimation of the worth of your business
How is it done ?
• In stead of following the more scientific DCF method, till the
growth stage as a thumb rule, the valuations are based on
revenue or EBITDA multiples
Why is it so crucial?
• It is the key point of negotiation by the parties involved.
• It determines the actual investment amount and the respective
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Why discussion on Exit now?
How can an investor exit?
• Promoters buyback
• Company buyback
• Strategic Sale
• Initial Public Offering (IPO)
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Why does an investor need an exit at all ?
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1. Understand and assess the impact of the terms
before you sign
2. Don’t negotiate hard but negotiate Smart
3. Take the advice of experienced consultants or
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