Document background
The Startup Investment Term Sheet is a crucial document used in the Nigerian startup ecosystem when companies seek to raise capital from investors. It serves as a preliminary framework that captures the essential commercial and legal terms of a proposed investment, typically used after initial discussions but before detailed due diligence and final documentation. This document must comply with Nigerian legislation, including CAMA 2020 and relevant securities laws, while also meeting international investment standards. It outlines key aspects such as valuation, investment structure, governance rights, and exit provisions, forming the basis for the subsequent detailed investment agreements. While generally non-binding (except for confidentiality and exclusivity clauses), it represents a significant milestone in the investment process and requires careful consideration from all parties involved.
