The term sheet stage of a raise
Once a lead investor signs a term sheet, the raise moves from selling to closing. Open full diligence to the lead and its counsel, keep other prospects at summary level, prepare the closing documents in a separate folder, and track every request so nothing waits on email.
Folder index
- 01 Signed term sheet Executed term sheet and any side terms agreed with the lead.
- 02 Corporate records Charter, bylaws, board and stockholder minutes, good standing.
- 03 Capitalization Cap table, prior financing documents, option plan and grants, pro forma.
- 04 Financials Statements, model, budget, debt schedule.
- 05 Material contracts Top customer and supplier contracts, leases, loans.
- 06 IP Patents, trademarks, invention assignments, open source list.
- 07 People Key employee agreements, contractor terms, benefits.
How this raise works
In a priced venture round, the term sheet sets price, preference, board seats, protective provisions and option pool. Many US rounds use the NVCA model documents as a starting point. Most terms are non-binding, while confidentiality, exclusivity (a no-shop, often 30 to 60 days) and expenses usually bind.
Confirmatory diligence follows. The lead's counsel reviews the charter, prior financings and cap table, material contracts, IP assignments, employment matters and any litigation. Findings flow into the disclosure schedule and sometimes into the final terms. Follow-on investors often rely on the lead's work and ask for a lighter set.
Closing documents are drafted at the same time: the stock purchase agreement, amended charter, investors' rights, voting and right of first refusal agreements, board and stockholder consents. Keeping drafts, signature pages and the funds flow in one place shortens the gap between agreeing terms and receiving money.
Best data rooms for this raise
The 16 rooms re-ranked with this raise's weights. Raise workflow carries the most weight here.
- Investor tracking 18%
- Permission control 22%
- Raise workflow 27%
- Investor onboarding 18%
- Cost of a raise 16%
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Full deal room with AI, a listed price and a 14-day free trial.
Price $149 a month Trial 14-day free trial Features 8 of 12 listed -
Long-running M&A platform with layered permissions and fast support.
Price Priced on request Trial Free trial available Features 9 of 12 listed -
Bank-grade platform for large processes, with AI and a mobile app.
Price Priced on request Trial Demo on request Features 10 of 12 listed -
Simple flat-rate deal room with signing and Q&A.
Price $250 a month Trial Free trial available Features 8 of 12 listed -
Deal room with AI and readiness tools for preparing a process.
Price Priced on request Trial Free trial available Features 8 of 12 listed -
Easy, reliable deal room favored by mid-market advisers.
Price Priced on request Trial Free trial available Features 7 of 12 listed -
One of the oldest deal rooms, common on bank-led transactions.
Price Priced on request Trial Demo on request Features 8 of 12 listed -
Deal room with a listed monthly price and an open API.
Price $299 a month Trial Free trial available Features 7 of 12 listed -
Content cloud with watermarks and signing, priced per user.
Price $15 a user a month Trial Free trial available Features 9 of 12 listed -
European deal room strong in real estate, with AI features.
Price Priced on request Trial Demo on request Features 8 of 12 listed
Places 11 to 16: DealRoom (7.0), SmartRoom (7.0), ShareVault (6.8), Venue by DFIN (6.2), Digify (6.1), DocSend (6.0)
Folder index for the room
A starting index for this raise. Number the folders so the order survives exports and investors can cite them in questions.
- 01 Signed term sheetExecuted term sheet and any side terms agreed with the lead.
- 02 Corporate recordsCharter, bylaws, board and stockholder minutes, good standing.
- 03 CapitalizationCap table, prior financing documents, option plan and grants, pro forma.
- 04 FinancialsStatements, model, budget, debt schedule.
- 05 Material contractsTop customer and supplier contracts, leases, loans.
- 06 IPPatents, trademarks, invention assignments, open source list.
- 07 PeopleKey employee agreements, contractor terms, benefits.
- 08 Legal and complianceLitigation, permits, privacy, export matters if any.
- 09 Closing documentsDrafts, disclosure schedule, signature pages, funds flow.
- 10 Request trackerOpen diligence requests with owner and due date.
Features this raise needs
| Feature | Why | Ellty | iDeals | Datasite | SecureDocs | Ansarada | Firmex |
|---|---|---|---|---|---|---|---|
| Q&A module | LPs and lead investors post questions on a file; the deal team routes each one, drafts a reply and decides who sees it. | ||||||
| NDA e-sign step | Confidentiality terms an investor must accept in the room before folder one appears. | ||||||
| Investor activity log | A per-investor record of opens, pages and minutes, which tells the IR team who is in diligence and who stalled. | ||||||
| Built-in redaction | Masks fee splits, investor names or personal data in place, with no edited duplicate to keep in sync. |
Setting up the room
- 01
Re-scope access
Move the lead and its counsel to a full-access group and keep other prospects on summary folders.
- 02
Import the lead counsel list
Import the lead's diligence list into the room and assign an owner to each item.
- 03
Fix the cap table first
Reconcile the cap table with the charter, consents and grant records before counsel starts drafting.
- 04
Draft in one place
Keep closing document drafts and the disclosure schedule in a folder limited to counsel on both sides.
- 05
Collect signatures and close
Gather signature pages electronically, release them on funding and archive the closing set.
Common mistakes
- Opening full diligence to every prospect after the term sheet, which leaks the lead's price.
- A cap table that does not match board consents, delaying the closing.
- Missing invention assignments found by the lead's counsel late in the no-shop.
Calculators for this raise
Or take the four-question quiz and check the raise checklist.
Questions and answers
Is a term sheet binding?
Mostly not. Price and economic terms are usually non-binding, while confidentiality, exclusivity and expense provisions usually bind.
How long from term sheet to closing?
Commonly four to eight weeks for a venture round, depending on diligence findings and the number of investors.
Do follow-on investors run their own diligence?
They may, but many rely mainly on the lead's review and ask for a subset of the room.