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    Term Sheet

    Non-binding outline of the key economic and control terms of an investment.

    Reviewed by Christian Espinosa, Founder, Blue Goat CyberLast reviewed May 5, 2026

    Definition

    A term sheet summarizes the principal terms of a proposed financing - valuation, amount, security type, board composition, liquidation preference, anti-dilution, protective provisions - before counsel drafts definitive documents.

    What this means in practice

    In MedTech, term sheets often include milestone-based tranches tied to regulatory or clinical events (e.g., Tranche 2 releases on IDE approval). Founders should focus as much on control terms (board, protective provisions) as on valuation.

    Examples

    • A Series B term sheet for a $40M round with a $120M pre-money, 1x non-participating preferred, and a 2-of-5 board with one independent director.
    Common pitfalls
    • •Optimizing only for valuation and ignoring liquidation preferences, participation, or protective provisions.
    • •Signing exclusivity (no-shop) without a clear timeline.

    Cross-references

    Contains

    Sub-elements or required artefacts of this term.

    Primary references

    3 sources
    Link health: 2 verified 1 bot-blocked· last checked 2026-05-09
    NVCA·1SVB·1PitchBook·1
    1. 1
      NVCA Model Term Sheet
      Verified
      NVCAnvca.org
    2. 2
      Silicon Valley Bank - Healthcare Reports
      Verified
      SVBsvb.com
    3. 3
      PitchBook - MedTech Coverage
      Bot-blocked
      PitchBookpitchbook.com

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