Investment agreement term sheet Template for Pakistan

An Investment agreement term sheet lays out the key points of a potential investment deal in Pakistan, acting as a roadmap before the full legal agreement. It captures essential details like investment amount, equity stake, voting rights, and exit terms between investors and company owners - similar to a business engagement proposal.

While not legally binding in most cases under Pakistani contract law, term sheets help parties align their expectations early and speed up the final agreement process. The Securities and Exchange Commission of Pakistan recommends including valuation methods, board representation rights, and any special investor protections to avoid disputes later. Most Pakistani startups and growth companies use these documents during fundraising rounds.

Use an Investment agreement term sheet when you're ready to move forward with serious investment discussions but before drafting the final legal documents. Pakistani startups typically prepare these when approaching angel investors, venture capital firms, or strategic corporate investors who have shown genuine interest after initial meetings.

The timing is crucial - create it after preliminary discussions establish basic alignment but before spending resources on detailed legal agreements. Companies seeking Series A funding in Pakistan's growing tech sector find term sheets especially valuable, as they help navigate SECP regulations while setting clear expectations about valuation, governance rights, and exit mechanisms early in the process.

• Basic Equity Investment Term Sheet: Outlines straightforward investment terms for early-stage Pakistani startups, focusing on share price, ownership percentages, and basic investor rights
• Convertible Note Term Sheet: Details debt-to-equity conversion terms, popular among Pakistani angel investors for seed-stage investments
• Strategic Investment Term Sheet: Includes additional provisions for corporate investors, like right of first refusal and technology licensing terms
• Series A Term Sheet: More comprehensive version covering sophisticated terms like anti-dilution rights, board seats, and preferred share structures
• Bridge Round Term Sheet: Shorter format used for interim funding rounds, typically with simpler terms and quicker execution timelines

• Startup Founders: Work with legal counsel to draft Investment agreement term sheets when seeking funding, ensuring their company's interests are protected
• Angel Investors: Review and negotiate terms before committing capital to early-stage Pakistani companies
• Venture Capital Firms: Propose and refine term sheets based on their standard investment criteria and risk assessment
• Corporate Lawyers: Draft and review terms to ensure compliance with SECP regulations and protect client interests
• Investment Banks: Facilitate negotiations between parties and help structure deals for larger funding rounds
• Company Directors: Review and approve final terms before moving forward with investment agreements

• Company Valuation: Gather recent financial statements, growth projections, and market comparables to establish a fair company value
• Investment Structure: Decide on equity type, share price, and investment amount based on your funding needs
• Key Rights: Define voting rights, board seats, and veto powers you're willing to offer investors
• Exit Mechanisms: Plan clear paths for investor exits through IPO, buyback, or third-party sale options
• Compliance Check: Review SECP regulations regarding share issuance and foreign investment rules
• Documentation: Collect company registration, tax records, and existing shareholder agreements
• Legal Review: Use our platform to generate a compliant term sheet that includes all essential elements

• Investment Details: Precise investment amount, valuation, and share price or convertible note terms
• Ownership Structure: Post-investment equity distribution and share class specifications
• Investor Rights: Board representation, voting rights, and information access privileges
• Anti-dilution Protection: Safeguards against future funding rounds impacting investor stake
• Exit Provisions: Tag-along rights, drag-along rights, and liquidation preferences
• Governing Law: Clear statement of Pakistani law application and SECP compliance
• Confidentiality: Non-disclosure terms for sensitive business information
• Binding Clauses: Specification of which terms are legally binding versus non-binding

Let's compare an Investment agreement term sheet with an Investment Agreement, as these documents often cause confusion in Pakistan's startup ecosystem. While they're related, they serve distinct purposes in the investment process.

• Legal Binding Nature: Term sheets are typically non-binding (except for confidentiality clauses), serving as preliminary documents. Investment Agreements are fully binding legal contracts
• Detail Level: Term sheets provide high-level key terms and basic structure, while Investment Agreements contain comprehensive legal language and detailed provisions
• Timing: Term sheets come first during negotiations, while Investment Agreements are drafted after parties reach initial agreement on key terms
• Length and Complexity: Term sheets are brief (5-10 pages) and use simpler language. Investment Agreements can span 50+ pages with complex legal provisions
• Purpose: Term sheets facilitate quick agreement on major points, while Investment Agreements create enforceable legal obligations under Pakistani law