A Term Sheet spells out the terms. It is a non-binding agreement that establishes a level of trust. It is a part of the due diligence phase, meaning there is an intention to proceed with the purchase. A general idea of how the transaction will play out might be included. A Term Sheet can open the door for negotiation and hopefully an investment or purchase.
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Interesting Questions
Convertible debt can be seen as less risky because investors have the option to convert into equity if the company does well, providing a safety net if the business doesn't take off.
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Kansas City Missouri Term Sheet - Convertible Debt Financing