You will have access to various template documents on Cake, which you can check out here or by navigating to the Documents tab of your Cake account and then jumping into Templates 📚

Cake does not currently have a template Term Sheet available and instead, most companies will have this step in the raise process executed offline and will then jump into Cake to kick off the next steps on the back of this.

💁 Some helpful information on Term Sheets & when they are generally used -

Heads up though - not all raises will necessarily need a Term Sheet. Some investors will want to see a Term Sheet that summarises the terms of the investment. Others are happy to just review the Shareholders Agreement instead. Family and friends might just take your word for it. It will all depend on the raise round, and the sophistication of the investors.

Generally, a Term Sheet is not binding. Instead, it just sets out the general terms which will be included in the Shareholders Agreement and Subscription Agreement. It is basically an effective way for the Company and Investor to discuss whether any changes to the Shareholders Agreement (or Subscription Agreement) are required before an investor will invest.

For example, an Investor may want a right to appoint a director under the Shareholders Agreement. Or, she/he may want to ensure an ESOP has been factored into the Shareholders Agreement and the cap table, and so, this would be included in the Term Sheet.

Even though the Term Sheet is optional, it can give your investors a quick overview of the opportunity and the existing company governance. This is particularly important where your investors might be time-poor.

Once a Term Sheet is ‘agreed’ with an Investor, all the terms agreed should be reflected in the Shareholders Agreement. Once the Shareholders Agreement is finalised and signed by current shareholders, that will become the binding agreement.

If you require assistance in drafting a Term Sheet for your upcoming raise, Cake works with an awesome group of legal partners who will be able to help out with this - just submit a request for legal support!

Click the ? icon at the top of your Cake account and you will see Legal & Valuations help:

OR, click the 💬 icon in the bottom right and you will see a prompt here too! Our team will be in touch to introduce you to the most suitable legal partner to help you with drafting a Term Sheet 💪