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A term sheet is a non-binding agreement outlining the basic terms and conditions for an investment, serving as a preliminary document before a detailed contract. Commonly associated with startups and mergers and acquisitions, term sheets are utilized by entrepreneurs to attract venture capitalists. They provide a straightforward overview of the investment terms, making it easier for potential investors to understand the key points before delving into more complex agreements. Overall, the term sheet simplifies the investment discussion and sets the groundwork for future negotiations.