The Business Of Startups: Startup Seed Term Sheet

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The Startup Seed Term Sheet is an agreement that defines the business terms for a startup. It outlines what each party will do and how they will share in the risks and rewards of the company.

What should I know about this?

These Term Sheets are not a legal contract. Startup founders should have an attorney review the Sheet before they sign it.

Startup sheets start simple and get more complex as you add additional terms. Still, there is always some core information that will be included in every Sheet:

– The name of each party involved
– What type of entity is being created – C Corp., LLC, etc.
– Capital Contribution by each party i.e. how much money or property each side puts into the new company/entity
– Percentage ownership of equity stake for each party involved

We hope this information has been helpful to you.