Term Sheet (Germany) by Seedsummit
The Seedsummit Term Sheet for a Series Seed Financing outlines the key economic, governance, and legal terms for an early-stage equity investment in a company. It provides a non-binding framework for negotiation between founders and investors, defining essential deal terms such as valuation, investor rights, founder vesting, and board structure before drafting final legal agreements.
Term Sheet for a Series Seed Financing of [company name]
For a more comprehensive explanation of the economic and control terms set forth in this Term Sheet, see our Guide OLNS#9, which can be downloaded here. We analyse more than 500 VC financings across our European offices and present the most important findings and developments in our Deal Flow analysis, which can be found here.
This term sheet (Term Sheet) summarizes the principal terms and conditions of the proposed Series Seed financing (Series Seed) of [company name], registered with the commercial register at the local court of [registration court] under HRB [commercial register number] (Company). The transactions contemplated by this Term Sheet are, amongst others, subject to the satisfactory completion of due diligence. This Term Sheet neither constitutes an offer to sell or issue nor offers to purchase or subscribe to securities nor to make any investment. Unless explicitly set forth otherwise herein, this Term Sheet is legally nonbinding, and there is no obligation on the part of the undersigned parties hereto (together, the Negotiating Parties) to proceed with the Series Seed until definitive agreements are executed by all relevant parties.
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About this template
What is this template?
This document is a summary of proposed terms for an equity investment rather than a definitive share purchase agreement. It contains specific placeholders for a 1x non-participating liquidation preference and German-specific legal references like the BGB.
When should you use it?
Use this when negotiating the initial economic and control terms of a seed round before drafting full SHA and AoA documents. Use a Convertible Loan Note if the investment is structured as debt rather than preferred equity.
What's inside
| Clause | Name | What it does |
|---|---|---|
| Investment | Investment | Specifies a total investment round between [min investment amount] and [max investment amount] for general working capital purposes. |
| Preference Rights | Preference Rights | Establishes a 1x non-participating liquidation preference and weighted average anti-dilution protection for Series Seed Shares. |
| Advisory Board | Advisory Board | Allocates voting board seats to specific appointers and requires board consent for actions listed in Annex B. |
| Founder Vesting | Founder Vesting | Subjects [vesting percentage] of common shares to a 4-year linear monthly vesting schedule with a 12-month cliff. |
| Exclusivity | Exclusivity | Prohibits the Company from soliciting or negotiating other equity investments for [exclusivity period days] following execution. |
| Non-binding Nature | Non-binding Nature | Declares the document non-binding except for specific sections including Confidentiality, Exclusivity, and Governing Law. |
Who it's for
- a German startup company seeking Series Seed investment from venture capital firms
- investors providing at least EUR 500,000 in exchange for preferred shares
- founders subjecting their equity to a four-year vesting schedule with a cliff
How long it runs and how it's signed
Law it's drafted under
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