Funding Term Sheet Template for Ireland

A Funding Term Sheet is your roadmap for investment negotiations, setting out the key commercial and legal terms before you commit to formal investment agreements. Under Irish law, this document serves as a preliminary framework that helps investors and companies establish mutual understanding of the investment structure, valuation, and governance arrangements.

When do you need this document?

You need a Funding Term Sheet when your company is raising capital from external investors, whether through venture capital funds, angel investors, or strategic partners. This document becomes essential during Series A, B, or later funding rounds where you're issuing preference shares or convertible securities. You'll also require this when restructuring existing shareholdings, bringing in new board members, or when investors demand specific rights and protections. The term sheet is particularly crucial for technology startups, growth companies, and established businesses seeking expansion capital or strategic investment partnerships.

Key legal considerations

Your term sheet must clearly define the investment amount, share class structure, and valuation methodology to avoid future disputes. Pay careful attention to liquidation preferences, anti-dilution provisions, and dividend rights, as these significantly impact returns for both investors and existing shareholders. Board composition and voting rights require precise drafting to ensure proper corporate governance while protecting minority interests. Include comprehensive investor protection clauses covering information rights, pre-emption rights on future fundraising, and drag-along/tag-along provisions for exit scenarios. Consider the tax implications of different share classes and ensure compliance with Irish Revenue requirements for employee share schemes if applicable.

Legal requirements in Ireland

Under the Companies Act 2014, your term sheet must comply with Irish company law requirements for share issuance and shareholder rights. The document must respect existing constitutional documents and may require shareholder resolutions for implementation of certain provisions. If your company issues securities to professional investors, you must consider the European Union (Markets in Financial Instruments) Regulations 2017 and potential Central Bank of Ireland reporting requirements. For investment funds or institutional investors, ensure compliance with the Investment Limited Partnerships (Amendment) Act 2020 and relevant AIFMD regulations. The term sheet should address Irish corporate governance requirements, including director duties under the Companies Act and potential conflicts of interest disclosure obligations for board-level investors.