Investment Term Sheet (Singapore)
INVESTMENT TERM SHEET
NON-BINDING (except where expressly stated)
Date: [Term Sheet Date]
Investor: [Investor Name] ([Investor Type])
Company: [Company Name] (UEN: [Company UEN])
Business: [Company Description]
Investment Type: [Investment Type]
1. ECONOMIC TERMS
1.1 Pre-Money Valuation: [Pre Money Valuation]
1.2 Investment Amount: [Investment Amount]
1.3 Share Class: [Share Class]
1.4 Post-Money Investor Shareholding: [Post Money Holding]
1.5 Liquidation Preference: [Liquidation Preference]
1.6 Dividend Rights: [Dividend Right]
1.7 ESOP Pool: [ESOP Pool]
2. GOVERNANCE AND INVESTOR PROTECTIONS
2.1 Board Composition: [Board Composition]
2.2 Anti-Dilution: [Anti Dilution]
2.3 Founder Vesting: [Founder Vesting]
2.4 Investor Consent Rights: The following actions shall require prior written investor consent: (a) issuance of new shares or securities; (b) amendments to the constitution; (c) winding up or disposal of the company; (d) transactions with related parties above S$100,000; (e) incurring debt above S$500,000; and (f) material change in business.
2.5 Information Rights: The Investor shall receive: (a) monthly management accounts within 30 days of month-end; (b) audited annual accounts within 90 days of year-end; and (c) annual budget approved by the board.
2.6 Pro-rata Right: The Investor shall have the right to participate pro-rata in future equity financing rounds to maintain its percentage ownership.
2.7 Tag-Along / Drag-Along: Standard tag-along and drag-along rights to apply on a transfer of shares above 10%.
2.8 Right of First Refusal: The Investor shall have a right of first refusal on any proposed transfer of founder shares.
3. CONDITIONS TO CLOSING
3.1 This investment is conditional upon: (a) satisfactory completion of legal, financial, and technical due diligence; (b) execution of definitive transaction documents including Subscription Agreement and Shareholders' Agreement; (c) amendment of the Company's constitution to create the new share class; and (d) any regulatory approvals required.
4. BINDING PROVISIONS
4.1 This term sheet is NON-BINDING and does not constitute a legally binding agreement, except for clauses 4.2 and 4.3 which are binding.
4.2 EXCLUSIVITY: From the date of acceptance until [Expiry Date] ([Exclusivity Period] exclusivity period), the Company shall not solicit, negotiate, or enter into any agreement with any other investor regarding equity financing without the Investor's prior written consent.
4.3 CONFIDENTIALITY: The Company and founders shall keep the terms of this term sheet strictly confidential and shall not disclose them to any third party without the Investor's prior written consent, except to their legal and financial advisors on a need-to-know basis.
5. GOVERNING LAW
5.1 This term sheet and the definitive transaction documents shall be governed by and construed in accordance with the laws of Singapore.
5.2 Any disputes shall be resolved by arbitration at the Singapore International Arbitration Centre (SIAC).
This term sheet expires on [Expiry Date]. Please indicate acceptance by signing and returning a copy.
Investor
________________
Signature
Company (Authorised Signatory)
________________
Signature
What Is a Investment Term Sheet (Singapore)?
An Investment Term Sheet in Singapore records the parties' shared intentions and the framework for a contemplated transaction.
Term sheets are non-binding in their substantive investment terms but binding in certain procedural respects such as exclusivity and confidentiality. They define the structure and economics of the proposed investment, including pre-money valuation, investment amount, share class and rights, liquidation preference, anti-dilution mechanics, board composition, and key conditions to closing.
In Singapore, term sheets for early-stage VC deals often follow structures developed by the Singapore Venture Capital and Private Equity Association (SVCA) and international VC market practice. For growth equity and PE deals, more sophisticated structures involving preference shares with complex economics are common. The Singapore common law of contract and the Companies Act 1967 (Cap. 50) govern the core requirements for this type of document.
When Do You Need a Investment Term Sheet (Singapore)?
An Investment Term Sheet is used whenever a VC fund, angel investor, corporate venture arm, or PE fund proposes to invest in a Singapore company and the parties wish to agree on key terms before incurring the cost and time of preparing full legal documentation.
Term sheets are used in seed rounds, Series A through later venture rounds, and in secondary transactions. They are also used in M&A processes as letters of intent setting out acquisition terms before a share purchase agreement is drafted.
A term sheet is typically exchanged after the investor has completed initial screening and a preliminary meeting with founders, and before full legal and financial due diligence is completed. The Singapore common law of contract and the Companies Act 1967 (Cap. 50) govern the core requirements for this type of document.
What to Include in Your Investment Term Sheet (Singapore)
A Singapore Investment Term Sheet typically covers the following key terms.
Transaction structure: New share issuance (subscription) or secondary share purchase, or a combination.
Pre-money valuation: The agreed valuation before the new investment, from which post-money valuation and investor ownership percentage are calculated.
Investment amount and share class: Total investment, new shares to be issued, share class (ordinary or preference), and price per share.
Liquidation preference: 1x or higher preference, participating or non-participating, and ranking relative to other share classes.
Anti-dilution: Broad-based weighted average or full ratchet, with carve-outs for employee share options and permitted issuances.
Board composition: Number of board seats, investor nomination rights, independent director requirements.
Protective provisions: List of reserved matters requiring investor consent.
Information rights: Financial reporting obligations and investor access rights.
Conditions to closing: Due diligence completion, regulatory approvals, constitutional amendments, ESOP pool creation.
Exclusivity: Period during which the company and founders may not negotiate with other investors (typically 30-60 days).
Governing law: Singapore law; Singapore courts or SIAC arbitration. The forms-legal.com Investment Term Sheet (Singapore) template covers the mandatory elements of a Singapore investment term sheet. The Singapore common law of contract and the Companies Act 1967 (Cap. 50) govern the core requirements for this type of document.
Cite this page
Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Investment Term Sheet (Singapore) (Singapore) [Legal document template]. Forms Legal. https://forms-legal.com/singapore/financial/agreements/investment-term-sheet-singapore
"Investment Term Sheet (Singapore) (Singapore)." Forms Legal, 2026, https://forms-legal.com/singapore/financial/agreements/investment-term-sheet-singapore.
@misc{formslegal-investment-term-sheet-singapore,
author = {{Forms Legal}},
title = {Investment Term Sheet (Singapore) (Singapore)},
year = {2026},
howpublished = {\url{https://forms-legal.com/singapore/financial/agreements/investment-term-sheet-singapore}},
note = {Free legal document template. Based on Companies Act 1967 (Cap. 50)}
}Frequently Asked Questions
A term sheet is generally expressed to be non-binding in its substantive investment terms. However, certain provisions within a term sheet are typically binding, including exclusivity (no-shop) clauses, confidentiality obligations, and cost allocation provisions. Singapore courts apply general contract law principles to determine which provisions are intended to be binding. A term sheet that is expressed as a whole to be binding, or where the parties have acted in reliance on it, may be enforced as a binding preliminary agreement.
A liquidation preference gives preferred shareholders the right to receive a specified amount before ordinary shareholders in a liquidation, sale, or deemed liquidation event. A 1x non-participating liquidation preference means investors recover their investment amount first, then ordinary shareholders share the remaining proceeds. A participating preference means investors receive their preference amount and then also share in remaining proceeds alongside ordinary shareholders. Singapore company law permits different share classes with different rights, which must be reflected in the company constitution. Under Singapore law, specifically the Companies Act 1967 (Cap. 50), parties should seek independent legal advice to confirm compliance with all applicable requirements and confirm the document meets the standards set by the relevant regulatory authorities.
Anti-dilution provisions protect investors from the dilutive effect of future down rounds. Two main types are used in Singapore VC deals: (1) Broad-based weighted average anti-dilution, which adjusts the conversion price based on a formula accounting for shares outstanding before and after new issuance; and (2) Full ratchet anti-dilution, which reduces the conversion price to the lower down-round price regardless of the size of new issuance. Broad-based weighted average is the market standard in Singapore and is more founder-friendly than full ratchet. Under Singapore law, specifically the Companies Act 1967 (Cap. 50), parties should seek independent legal advice to confirm compliance with all applicable requirements and confirm the document meets the standards set by the relevant regulatory authorities.
Singapore VC investors typically seek: board representation (one or more board seats or observer rights); protective provisions (veto rights over specified major decisions such as change of business, incurring material debt, issuing new shares, or selling the company); information rights (quarterly management accounts, annual audited accounts, and access rights); and drag-along rights requiring founders and minority shareholders to support a sale if a majority of investors and founders approve. These rights are documented in a shareholders agreement executed alongside the subscription agreement. Under Singapore law, specifically the Companies Act 1967 (Cap. 50), parties should seek independent legal advice to confirm compliance with all applicable requirements and confirm the document meets the standards set by the relevant regulatory authorities.
A Investment Term Sheet (Singapore) does not legally require a lawyer in Singapore, and individuals and businesses may draft and execute the document independently. The Companies Act 1967 (Cap. 50) does not mandate legal representation for the creation or signing of this type of document. However, seeking independent legal advice from a qualified Singapore lawyer is recommended for transactions involving substantial financial value, complex regulatory requirements, or cross-border elements where multiple legal jurisdictions may apply. A lawyer can verify that the document complies with all applicable statutory requirements, identify potential risks specific to the transaction, and confirm that the terms adequately protect the interests of all parties involved. The Supreme Court of Singapore has jurisdiction over disputes arising from this type of document, and Accounting and Corporate Regulatory Authority (ACRA) may impose additional compliance obligations depending on the nature of the underlying transaction. Professional legal review is particularly advisable where the document will be submitted to government agencies or used as evidence in legal proceedings.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
Found an error? Let us knowRelated Documents
You may also find these documents useful:
Share Purchase Agreement (Singapore)
An agreement for the purchase and sale of shares in a Singapore private limited company, including seller warranties, indemnities, conditions precedent, and completion mechanics under the Companies Act 1967.
Subscription Agreement (Singapore)
An agreement for a primary subscription of new shares in a Singapore private limited company, documenting the subscription price, share class rights, conditions precedent, and investor representations under the Companies Act 1967.
Convertible Note Agreement (Singapore)
A convertible loan note for startup financing in Singapore, structured as debt that converts to equity upon a qualifying funding round or maturity. Governed by Singapore company and contract law with MAS SFA compliance considerations.
SAFE Agreement (Singapore)
A Simple Agreement for Future Equity adapted for Singapore startups. Provides investors with a right to future equity upon a triggering event without accruing interest or having a maturity date, under Singapore company and contract law.
Shareholders Loan Agreement (Singapore)
A loan agreement from a shareholder to their Singapore company, documenting the terms of the advance, interest provisions, subordination, and repayment, in compliance with the Companies Act 1967 and IRAS transfer pricing requirements.