Term Sheet B2B Template (Annotated for Founders)
last updated: Apr 19, 2026
Raising a B2B funding round means aligning expectations with investors — fast. Get straight to the terms that matter so you can stop arguing over legalese and get back to building your product.
TL;DR
Before diving into the template, here is what you need to know about setting the baseline for your raise.
A solid B2B term sheet outlines the critical financial and control terms of your investment round before you pay lawyers to draft the final binding agreements.
A solid B2B term sheet outlines the critical financial and control terms of your investment round before you pay lawyers to draft the final binding agreements.
- Rule: Keep control clauses simple and standard to close the round faster.
- Target: Aim for 15-20% equity dilution for a standard seed round.
Glossary
- Pre-money valuation: The agreed value of your company before the new investment capital is added to your bank account.
- Liquidation preference: The rule dictating how the payout is divided if the company is sold, ensuring investors get their money back first. Review HSBC Innovation Banking's deep dive on liquidation preferences to understand how a 1x non-participating preference protects both founders and investors.
- Pro rata rights: The right of an investor to participate in future funding rounds to maintain their exact percentage of ownership.
How to use the term sheet template
Copy the text below into your text editor. Replace the bracketed placeholders with your negotiated terms before sending it to lead investors.
Look at successful B2B term sheet examples to understand how other founders structure these clauses. If you are extremely early, grab a seed term sheet template instead.
CONFIDENTIAL TERM SHEET
[Company Name], Inc.
This term sheet summarizes the principal terms of the Series A Preferred Stock financing of [Company Name], Inc. (the "Company"). This term sheet is for discussion purposes only and is not a binding commitment.
1. OFFERING TERMS
Issuer: [Company Name], Inc., a [State of Incorporation] corporation.
Investors: [Lead Investor Name] and other investors approved by the Company.
Amount of Financing: Up to $[Amount], including $[Amount] from the Lead Investor.
Pre-Money Valuation: $[Valuation Amount] fully diluted.
Price Per Share: $[Price] per share (the "Original Issue Price").
2. LIQUIDATION PREFERENCE
In the event of any liquidation, dissolution, or winding up of the Company, the holders of Series A Preferred Stock will be entitled to receive, prior and in preference to any distribution to common stock holders, an amount equal to [1x] the Original Issue Price plus declared but unpaid dividends.
3. VOTING RIGHTS
The Series A Preferred Stock will vote together with the Common Stock on an as-converted basis, and not as a separate class except as required by law.
4. BOARD OF DIRECTORS
The size of the Company's Board of Directors will be set at [Number, e.g., 3] members. The Series A investors will have the right to designate [Number, e.g., 1] director.
5. INFORMATION RIGHTS
The Company will provide standard financial information and inspection rights to investors holding at least [Number] shares of Series A Preferred Stock.
6. EXCLUSIVITY
The Company agrees to work exclusively with the Lead Investor for a period of [30-45] days to finalize the definitive agreements.
Look at successful B2B term sheet examples to understand how other founders structure these clauses. If you are extremely early, grab a seed term sheet template instead.
CONFIDENTIAL TERM SHEET
[Company Name], Inc.
This term sheet summarizes the principal terms of the Series A Preferred Stock financing of [Company Name], Inc. (the "Company"). This term sheet is for discussion purposes only and is not a binding commitment.
1. OFFERING TERMS
Issuer: [Company Name], Inc., a [State of Incorporation] corporation.
Investors: [Lead Investor Name] and other investors approved by the Company.
Amount of Financing: Up to $[Amount], including $[Amount] from the Lead Investor.
Pre-Money Valuation: $[Valuation Amount] fully diluted.
Price Per Share: $[Price] per share (the "Original Issue Price").
2. LIQUIDATION PREFERENCE
In the event of any liquidation, dissolution, or winding up of the Company, the holders of Series A Preferred Stock will be entitled to receive, prior and in preference to any distribution to common stock holders, an amount equal to [1x] the Original Issue Price plus declared but unpaid dividends.
3. VOTING RIGHTS
The Series A Preferred Stock will vote together with the Common Stock on an as-converted basis, and not as a separate class except as required by law.
4. BOARD OF DIRECTORS
The size of the Company's Board of Directors will be set at [Number, e.g., 3] members. The Series A investors will have the right to designate [Number, e.g., 1] director.
5. INFORMATION RIGHTS
The Company will provide standard financial information and inspection rights to investors holding at least [Number] shares of Series A Preferred Stock.
6. EXCLUSIVITY
The Company agrees to work exclusively with the Lead Investor for a period of [30-45] days to finalize the definitive agreements.
Benchmarks
Benchmark: Target 15-20% equity dilution for a standard seed round. This aligns with baseline benchmarks for standard seed equity dilution.
Sample math.
If you raise $1,000,000 on a $4,000,000 pre-money valuation (making it a $5,000,000 post-money valuation), you are selling exactly 20% of the company.
Sample math.
If you raise $1,000,000 on a $4,000,000 pre-money valuation (making it a $5,000,000 post-money valuation), you are selling exactly 20% of the company.
Priced round vs SAFE
Standard Simple Agreements for Future Equity (SAFEs) are much faster and cheaper for your initial funding. You should only use a priced round term sheet when raising larger amounts where investors require a specific valuation and a board seat.
Risks
Do not agree to participating preferred stock unless absolutely necessary to save a failing round. GoingVC's breakdown of term sheet provisions highlights how participating preferred effectively allows investors to double-dip during an exit. Keep it to 1x non-participating.
Will a clean term sheet get you to $10K MRR?
Mastering your term sheet is a necessary step, but a clean legal document will not get you to $10,000 MRR on its own. Investors fund growth metrics, not just good paperwork. Stop treating the fundraise as the ultimate goal — you have to build a distribution engine that gets your product to paying customers to justify your valuation. This is why I built Traction OS — to help founders fix their foundation before launching.
FAQ
- You:What is the standard timeline to close after signing this template?Guide:It usually takes 30-45 days to complete due diligence, draft the final legal documents, and receive the wire transfer.
- You:Do I need a lawyer to sign a term sheet?Guide:Yes. While the term sheet itself is generally non-binding, it sets the precedent for the binding legal documents. Always have legal counsel review it before signing.
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