Term Sheet (Portugal) by Seedsummit

Updated 17 October 2025

This document is a template investment term sheet designed for a company incorporated in Portugal seeking investment from potential investors. It outlines the key commercial terms for a proposed subscription of preferred shares, intended to form the basis for a future, legally binding subscription and shareholders' agreement. The term sheet itself is largely non-binding, with exceptions for expenses, exclusivity, and confidentiality clauses.

SSeedsummit

TEMPLATE INVESTMENT TERM SHEET

The following template term sheet for investment is suitable for use between a company incorporated in Portugal and potential investors.

This term sheet has been drafted to include the provisions that a sophisticated investor would typically expect to see and may not be appropriate for all types of investors. Save in relation to the expenses, exclusivity and confidentiality sections, the term sheet does not purport to be a binding legal document. It sets out the basic commercial points to be agreed by the Founders and investors up front, with these matters being reflected in binding legal documentation (such as a subscription and shareholders' agreement) at the time the investors invest money in the company.

The text in square brackets indicates that information needs to be added or confirmed. Please ensure that all square brackets are completed and removed prior to signing the term sheet.

This document is not a substitute for legal advice and may need to be tailored to the circumstances to appropriately reflect the intentions of the parties.

[COMPANY]

SUMMARY OF TERMS FOR SUBSCRIPTION OF PREFERRED SHARES¹

¹ Important Notice: The document Preferred Round Term Sheet has been prepared for informational purposes and it is not a source of legal advice. Readers should seek legal advice before applying it to specific issues or operations.

This summary of terms represents the current understanding of the parties with respect to certain relevant matters relating to the proposed investment in the Company (as defined below). Nothing in this summary of terms constitutes a legally binding agreement. The parties intend to enter into a detailed, definitive and legally binding subscription and shareholders' agreement in due course to reflect these terms in a legally binding format.

Nothing in this summary of terms constitutes an offer to sell or a solicitation of an offer to buy securities in any jurisdiction where the offer or sale is not permitted.

Entered into between:

Company	[Company]
Founders	[Founder 1], [Founder 2], & [Founder 3]
Investors	[[Lead investor]] (the “Lead Investor”) in conjunction with other investors [[Additional investors]] (the “Investors”) mutually agreeable to the Lead Investor and the Company.
Investment Summary	The financing will be up to an aggregate of € [___] at a fully diluted pre-money valuation of € [___], including an unallocated [virtual/physical] employee stock option plan (“ESOP”) of [___]%. The Lead Investor intends to invest up to € [___] in return for no less than [___]% of the Company’s fully diluted shares. The remaining € [___] are reserved for the additional Investors.
Conditions to Close	(i) completion of confirmatory due diligence and anti-money laundering checks; (ii) all key employees having entered into service agreements containing IP assignment provisions; (iii) receipt of all necessary consents.
Estimated Closing Date	The definite and legally binding agreements to implement the investment by (i) subscribing to newly issued preferred shares, and (ii) making monetary contributions into the Company, shall be executed as soon as reasonably practicable and at the latest by [day]th of [month][year].
Type of Equity Interest	Newly issued preferred shares (“Preferred Shares”), which shall rank senior to all other shares of the Company.
Priority Payment on Exit (Liquidation Preference)	Upon a (i) liquidation; (ii) dissolution; (iii) winding up; (iv) merger; (v) sale; (vi) exclusive license or other sale of substantially all of the assets or a majority of the shares of the Company (“Change of Control”): [Option 1]: [the holders of the Preferred Shares shall receive the higher of: (a) One time the original purchase price for the Preferred Shares; or (b) The amount they would receive if all shareholders received their pro rata share of such assets or proceeds.] [Option 2]: [(a) the holders of the Preferred Shares shall receive one time the original purchase price for the Preferred Shares; and (b) all shareholders shall receive their pro rata share of any remaining assets or proceeds.]² ² NOTE: The second option (double dip) is not typically included in this stage investment rounds. It is not founder-friendly and it may prevent certain investments from being successfully concluded.
[Anti-Dilution]	Whenever, subsequent to the issuance of the Preferred Shares, the Company wishes to issue any new shares or subscription rights or acquire shares, at a subscription price per share less than the Preferred Shares’ subscription price, new Preferred Shares will be assigned to the Investors, in proportion to their share capital participation, in order to ensure the reduction of the dilution of the economic value of their participation, resulting in a final price per share corresponding to the weighted average of the Preferred Shares’ subscription price and subscription price per new share.
Reserved Matters at Shareholders’ Meetings / Protective Provisions	[Option 1] [The consent of the holders of more than [___]% / the majority of the Preferred Shares ( “Preferred Majority”) shall be required to: (i) alter the rights of the Preferred Shares; (ii) allot any new shares beyond those anticipated by this investment; (iii) create any new class or series of shares having rights, preferences or privileges senior to or on a parity with the Preferred Shares; (iv) increase the number of shares reserved for issuance under the ESOP or otherwise; (v) redeem or the selling of any shares; (vi) pay or declare dividends or distributions to shareholders; (vii) change the number of board members; (viii) take any action which results in a Change of Control; (ix) amend the constitutional documents; (x) effect any material change to the nature of the business or the agreed business plan; (xi) subscribe or otherwise acquire, or dispose of any shares in the capital of any other company.] [Option 2] [The consent of the holders of more than [___]% / the majority of the Preferred Shares (“Preferred Majority”) shall be required for the important decisions, substantially in the form listed in Appendix [___])].
Board of Directors’ composition and activity	The board of directors of the Company (gerência or conselho de administração – as applicable) (the “Board”) shall consist of a maximum of [three] members: the Founders may appoint [two] directors and the holders of Preferred Shares may appoint [one] director (the “Preferred Director”). The Lead Investor may appoint a non-voting observer to attend meetings of the Board. Board meetings shall take place, at least, [___] time(s) per [week/month/quarter] and [weekly/monthly/quarterly] reporting shall be distributed to the Board (KPIs and format to be determined at a later stage).
Board Reserved Matters	The favourable vote of the Preferred Director shall be required to approve the Board Reserved Matters listed in Appendix [___].
Remuneration	Only executive board members will be remunerated. The Preferred Director will be non-executive.
Conversion	Each holder of Preferred Shares shall have the right to convert its shares at any time into ordinary shares of the Company (“Ordinary Shares”) at an initial conversion rate of 1, subject to proportional adjustment for share splits, dividends or recapitalisations [and any anti-dilution adjustments]. The Preferred Shares shall automatically convert into Ordinary Shares if (a) a Preferred Majority consents to such conversion; or (b) upon the closing of a firmly underwritten public offering of shares of the Company.
Pre-emption	All shareholders will have a pro rata right, but not an obligation, based on their ownership of issued capital, to participate in subsequent financings of the Company (subject to customary exceptions). Any shares not subscribed for may be reallocated among the other shareholders. The Investors may assign this right to another member of their group of companies.
Right of First Refusal and Co-Sale	The holders of Preferred Shares shall have a pro rata right, but not an obligation, based on their ownership of Preferred Shares, to participate on identical terms in transfers of [any shares / over [__] % of the shares] of the Company, and a right of first refusal on such transfers (subject to customary permitted transfers, including transfers by the Investor to related companies and funds). Any shares not purchased by the holders of Preferred Shares would then be offered to the holders of Ordinary Shares.
Tag-Along	Any shareholder shall have a pro rata tag along right in the event other shareholders intend to sell some or all of their shares, which in case the intended sale is to a competitor or would result in a change of control shall become a full tag along right (“Tag Along”).
Drag Along	In the event that the Preferred Majority and the holders of a majority of the Ordinary Shares of the share capital of the Company wish to accept an offer to sell all of their shares in one or a series of related transactions to a third party, or enter into a Change of Control event of the Company, then subject to the approval of the Board, all other shareholders shall be required to sell their shares or to consent to the transaction on the same terms and conditions, subject to the applicable liquidation preferences of the Preferred Shares.
Restrictive Covenants and Founders Undertakings	Each Founder will enter into a non-competition and non-solicitation agreement, and an agreement – to be entered into in the appropriate form in accordance with the specific situation – in a form reasonably acceptable to the [Lead Investor / Investors], and shall agree to devote their entire business time and attention to the Company and to not undertake additional activities without the consent of the [Lead Investor / Investors]. A breach of any of the foregoing restrictive covenants or undertakings by a Founder may eventually (i) result in the dismissal of such Founder, as well as (ii) give rise to compensation for damages caused.
Founder Shares	Shares held by the Founders will be subject to reverse vesting provisions over three years as follows: [25% to vest one year after Closing and the remaining 75% to vest in equal monthly instalments over the next following two years (the “Vesting Period”).] During the Vesting Period and to the fullest extent legally admissible, any vested and unvested shares shall be purchased by the Company or pro rata by the remaining shareholders, in accordance with the terms and conditions set forth below. If a Founder departs the Company for any cause attributable to him or whenever the law or a court decision denies the Founder to stay or to exercise his activity in the Company (“Bad Leaver”), any vested and unvested shares shall be purchased by the Company, to the extent permitted by law (with a secondary purchase option for the remaining shareholders), at the lower of (i) the nominal value of the shares, (ii) the subscription price of the shares, (iii) the value determined by an independent auditor using internationally recognized principles and methodologies for the appraisal of enterprises (“Market Value”), or (v) the book value of the shares. If a Founder that leaves the company is not deemed a Bad Leaver (“Good Leaver”), the board shall determine whether (i) such Founder retains all of the vested shares, or (ii) the Company purchases all of the vested shares, to the extent permitted by law (with a secondary purchase option for the remaining shareholders), for a purchase price determined by the higher of the nominal value and the Market value of such shares. All of the Good Leaver’s unvested shares shall be subject to the terms and conditions set forth for the acquisition of a Bad Leaver’s shares. [There shall be acceleration upon double trigger provisions so that if a Founder leaves after a Change of Control, unvested shares may become vested.]
Information and Management Rights	The Lead Investor shall receive [weekly/monthly/quarterly] reporting and monthly financial information [and a management rights letter to satisfy its venture capital operating company requirements.]
Documentation and Warranties	Definitive agreements shall be drafted by counsel to the [Lead Investor/Company] and shall include customary covenants, representations and warranties of the Company (which shall be liable up to a maximum of the investment amount) reflecting the provisions set forth herein and other provisions typical of venture capital transactions.
Expenses	[Option 1] [The Company shall pay the Lead Investor’s fees and expenses in the transaction at Closing, anticipated not to exceed € [___].] [Option 2] [Each party shall pay their own legal and other fees and expenses in the transaction. If the financing does not complete within [___] days or because the Company withdraws from negotiations (except as a result of the Lead Investor making a material change in the terms), the Company shall bear the Lead Investor’s documented legal costs incurred to that date.]
Exclusivity	In consideration of the Lead Investor committing time and expense to put in place this financing, the Company and Founders agree not to discuss, negotiate or accept any proposals regarding the sale or other disposition of debt or equity securities, or a sale of material assets of the Company for [45] days from the date of the Company’s signature below.
Confidentiality	The contents and existence of this term sheet, as well as any information disclosed by the Company to the Lead Investor in respect of the Company and its business, are confidential and will not be disclosed or distributed by the undersigned without prior written agreement signed by each of the parties hetero, except as strictly required to its shareholders and professional advisors, and/or as strictly required as to perform its obligations arising from mandatory provisions of law, court orders or regulatory and/or governmental bodies.
Non-binding Effect	This Summary of Terms is not intended to be legally binding, with the exception of this paragraph and the paragraphs entitled Expenses, Exclusivity and Confidentiality, which are binding upon the parties hereto.
Applicable Law and Jurisdiction	This Summary of Terms and the relations among the parties arising thereof shall be govern by and construed in accordance with the laws of Portugal.

Acknowledged and agreed:

[Lead investor]	[Company]
By: __________________________	[Founder 1]
Print Name: __________________________	By: __________________________
Title: __________________________	Print Name: __________________________
Date: __________________________	Title: __________________________
[Additional investor]	Date: __________________________
By: __________________________	[Founder 2]
Print Name: __________________________	By: __________________________
Title: __________________________	Print Name: __________________________
Date: __________________________	Date: __________________________
	[Founder 3]
	By: __________________________
	Print Name: __________________________
	Date: __________________________

[ SIGNATURE PAGE TO [ ] LIMITED TERM SHEET ]

APPENDIX A

CAPITALISATION TABLE

Shareholder	Class of Shares	No. of Shares.	Ownership (%)
[Founder 1]	[Ordinary Shares]	•	•%
[Founder 2]	[Ordinary Shares]	•	•%
[Founder 3]	[Ordinary Shares]	•	•%
[Lead investor]	[Seed Shares]	•	•%
[Additional investor]	[Seed Shares]	•	•%
Option Pool	[Ordinary Shares]	•	•%
Total		•	100

About this template

What is this template?

Term Sheet (Portugal) by Seedsummit is a free, ready-to-use Pre-Seed & Seed Funding template you can open, customize, and download on GitLaw. It gives you a professionally structured starting point, so you never have to draft from a blank page. The wording is plain and modern, organized into clear sections that are easy to read, edit, and adapt to your own situation before you share or sign it.

When should you use it?

Reach for this Pre-Seed & Seed Funding template whenever you need a reliable agreement quickly and want to be sure the essentials are covered. It suits individuals, freelancers, startups, and established businesses alike. Instead of paying for a document drafted from scratch, you can start here, tailor the details to your arrangement, and have a polished draft ready in minutes. This version is drafted with Portugal in mind, though you should always review the final wording against the laws that apply to you.

What's typically included?

A well-drafted Pre-Seed & Seed Funding usually sets out the parties involved, the scope of the agreement, and each side's rights and responsibilities. Expect sections covering key terms and definitions, how long the agreement lasts, how it can be ended, and what happens if something goes wrong. This template brings those building blocks together in a sensible order, so you can focus on the specifics rather than worrying about what to include. Open it to read the full document, then sign up to edit, negotiate, and e-sign it directly in GitLaw.