Term Sheet
A mostly non-binding outline of the terms on which an investor proposes to invest.
A term sheet sets out the economics and control terms of a proposed investment: valuation, amount, liquidation preference, board composition, and investor protections. Most of it is non-binding, but exclusivity and confidentiality clauses usually are.
The valuation attracts the attention, but the control terms often matter more. Board composition, protective provisions and liquidation preference determine what happens in every scenario other than the best one.
Signing a term sheet effectively ends the process with other investors — the exclusivity clause is binding, and reputationally you have committed. Run the comparison before signing, not after.