Term Sheet, Letter of Intent, MOU.

Templates for Asset Purchase, Stock Purchase, Cash & Stock Purchase, Earnout, Series A & Series B Financing, Joint Venture Formation, Product & Technology Licensing, Technology Development, and more.

A term sheet is a short document outlining the material terms and conditions of a business deal. These business deals very often involve the buying and selling of a business or the formation of a joint venture. After a term sheet has been “executed”, it guides legal counsel in the preparation of a proposed “final or definitive agreement”. The term sheet implies the details of the transaction, as proposed by one party and, if signed, accepted by the other party. It may be either binding or non-binding.

The term sheet are very similar to a “letter of intent” (LOI) or a memorandum of understanding (MOU) in that they are all preliminary, mostly non-binding documents meant to record two or more parties’ intentions to enter into a future agreement based on specified (but incomplete or preliminary) terms. The difference between the two is slight and mostly a matter of style: an LOI/MOU is typically written in letter form and focuses on the parties’ intentions; a term sheet skips most of the formalities and lists deal terms in bullet-point or similar format. There is an implication that an LOI only refers to the final form before the written agreement. A term sheet may be a proposal, not necessarily an agreed-to document.

Transaction Types
Below is a summary of the various transaction types along with links to download and preview deal templates as well as for reviewing more detailed descriptive information  should you require it.

Buy/Sell Business
You can sell your business by either selling all of the stock (or limited liability company or partnership interests) of the company or by selling the company’s assets. There are other ways to execute a sale such as through a merger or stock exchange, but stock or asset sale are the most common methods and are likely to be the alternatives you will be dealing with in a term sheet.

There is another component of purchasing a business called an Earnout. Earnout refers to a pricing structure in mergers and acquisitions where the sellers must “earn” part of the purchase price based on the performance of the business following the acquisition.

Asset Purchase                  Additional Info                     

Stock Purchase                  Additional Info                    

Earnout                               Additional Info                     

 

Licensing
For many products and technology, licensing offers the best balance of success vs. risk. Why? Because when done properly, one can get a fantastic return on their investment in both time and money, while doing relatively little work, and mostly focusing on improvements. Licensing offers a balance of risk and reward, because it allows you to leverage the success of an already established company for distribution or technology development.

Product License                Additional Info                    

Technology License         Additional Info                     

Technology                        Additional Info                     
Development License

 

Joint Venture

A joint venture (JV) is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity. In a joint venture, each of the participants is responsible for profits, losses and costs associated with it. However, the venture is its own entity, separate and apart from the participants’ other business interests.

Although they are a partnership in the business sense of the word, JVs can take on any legal structure. Corporations, partnerships, limited liability companies and other business entities can all be used to form a JV.

Joint Venture                     Additional Info                    

 

Deal Documents
To effectively complete the M&A deal, Joint Venture, or Strategic Alliance, please click below to get the various documents required:

Term SheetDue Diligence Company ValuationDefinitive Agreement
Post Merger IntegrationGovernance & BoardApproach Targets

 

 

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