Term sheet review, before you sign.
For founders in Toronto and across Canada with a term sheet in hand. We explain what each term costs you, what is common at your stage, and what is worth negotiating, then help you through diligence and closing. Every piece of work has a fixed fee, agreed in writing before we start.
A free 15-minute call. You’ll know the fixed fee before any work starts.
What we help with
- Term Sheet ReviewWe read the term sheet against your cap table and explain what each term costs you, what is market, and what to push back on. Fixed fee agreed on the free call.
- Investor Due Diligence PrepYour minute book, cap table and IP records in order before the investor’s lawyers ask. From $1,480
- SAFE RoundIf the round is on SAFEs instead of priced shares, the SAFEs and the securities filing. From $2,600
- Shareholder AgreementThe founders’ agreement updated, or replaced, to sit alongside the investors’ terms. From $1,320
- Stock Option PlanThe option pool the term sheet asks for, set up as a plan your team can actually receive grants under. From $1,880
Prices shown are starting prices in Canadian dollars for the base scope of each item and may vary based on complexity. Government filing fees are extra. Your fee is fixed and agreed in writing before we begin.
How we approach a term sheet
- Step
Read it before you sign.
Most of a term sheet isn’t binding, but signing it usually starts an exclusivity period. Your negotiating room is widest before that.
- Step
Check the numbers against your cap table.
The headline valuation means less than it looks if the option pool comes out of the pre-money, or the preference stacks up ahead of common.
- Step
Prepare for diligence.
Clean records shorten the deal. Gaps found during diligence tend to cost time and leverage.
Brooke & For Founders Law brought sharp legal judgment to every stage of building DMP, from our SAFE deal suite and shareholder agreement to IP assignment, privacy compliance and our terms of service. Her ability to move fast without cutting corners gave us the confidence to build on solid legal ground. We couldn’t have gotten here without her.
Questions
What is a term sheet?
A short summary of the key terms of an investment: price, amount, the rights the investor gets, and the conditions to closing. The lawyers then turn it into the full round documents.
Is a term sheet legally binding?
Mostly not. The economic and control terms are usually non-binding, but clauses on confidentiality, exclusivity (a no-shop) and sometimes expenses usually are binding once you sign.
Which terms matter most?
Usually the pre-money valuation and the size of the option pool, the liquidation preference, anti-dilution protection, board seats, and the list of decisions that need investor approval. A 1x non-participating preference and broad-based weighted-average anti-dilution are common in early rounds.
What is the option pool shuffle?
When the term sheet requires a new or larger option pool to be created before the investment, it dilutes the existing shareholders only, which lowers the effective pre-money valuation. Our guide works through an example.
Does a SAFE round have a term sheet?
Often not a full one. In a SAFE round the key terms are in the SAFE itself: the amount, the valuation cap, any discount, and side letters such as pro rata rights.
What does a term sheet review cost?
A fixed fee agreed in writing before we start, based on the round. We confirm it on the free 15-minute call.
General information, not legal advice.
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