Free Term Sheet Checker & Analyzer for Founders
A term sheet is one of the most important documents a founder will ever sign — but it's also full of jargon and complex clauses. Our free Term Sheet Checker helps you quickly understand what's in front of you. Paste in key terms, and the tool highlights potential red flags, explains investor jargon in plain English, and benchmarks clauses against market norms. This gives you the knowledge you need to negotiate confidently and protect your long-term equity.
What Is a Term Sheet?
A term sheet is a non-binding agreement that sets the framework for an investment deal between founders and investors. It covers:
While not legally binding in every detail, the term sheet dictates the direction of your fundraising deal.
Why Use Our Term Sheet Checker?
Spot Red Flags Early
Identify terms that could reduce founder control or equity before you sign anything.
Compare to Market Standards
See how common or uncommon each clause is compared to typical VC deals.
Simplify Legal Jargon
Get plain English explanations of complex terms so you understand exactly what you're signing.
Negotiate From Strength
Go into investor conversations informed and prepared with data-backed insights.
How to Use the Term Sheet Checker
Paste or Upload Your Term Sheet
Upload a PDF or Word document, or paste the relevant clauses directly into the text field.
Review the Analysis
Get automated analysis showing red flags, clause explanations, and a comprehensive summary of your founder position.
Take Action
Download or copy your results for discussion with co-founders, mentors, or legal counsel.
Negotiate Confidently
Use our plain-language explanations to guide your negotiations with investors.
Key Term Sheet Clauses Explained
Liquidation Preference
Determines who gets paid first when the company exits. A "1× non-participating preference" is founder-friendly, while higher multiples or "participating" preferences can heavily dilute founders at exit.
Anti-Dilution Protection
Protects investors if new shares are issued at a lower price. "Weighted average" anti-dilution is market standard and reasonable; "full-ratchet" protection is far harsher on founders and should be avoided.
Vesting Schedules
Ensures founders earn their equity over time, usually with a 4-year vesting schedule and a 1-year cliff. This protects investors if founders leave early but can restrict founder flexibility.
Board & Voting Rights
Defines how much influence investors have over strategic decisions. Pay close attention to board composition, protective provisions, and veto powers over key business decisions.
Frequently Asked Questions
Is this legal advice?
No. This tool provides analysis and education only. Always seek qualified legal counsel before signing any investment documents.
Will this work for any investor term sheet?
Yes — it covers most VC, angel, and accelerator term sheets across US, UK, and EU jurisdictions. Some unusual clauses may need professional legal review.
What is a "participating preference"?
It means investors get their money back first AND share in the remaining proceeds. This is less favorable for founders compared to non-participating preferences.
Why should I check anti-dilution clauses?
Because they determine how much your ownership percentage is reduced if you raise money at a lower valuation in future funding rounds.
How accurate is the automated analysis?
Our AI analyzer is trained on thousands of real term sheets and market data. However, every deal is unique, so always validate findings with experienced advisors or legal counsel.
Powered by Buybill
This tool is part of Buybill, the AI-powered operations platform for ambitious SMEs and founders. Alongside risk registers, compliance tools, and sustainability management, Buybill provides free resources like this checker to help entrepreneurs succeed.
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Legal Disclaimer
The Buybill Term Sheet Checker is a free educational tool designed to help startup founders better understand and evaluate typical clauses found in VC term sheets.
This tool does not constitute legal advice, and its outputs are not a substitute for review by a qualified legal professional. The tool is designed for informational purposes only and is based on publicly available term sheet standards and best practices in select jurisdictions (US, UK, EU).
Buybill makes no representations or warranties about the accuracy or completeness of the tool's output, and accepts no liability for any actions taken or decisions made in reliance on this tool.
Founders are strongly advised to consult competent legal counsel before signing any binding investment documents. By using this tool, you agree to these terms and understand that no lawyer-client relationship is created between you and Buybill.
Use of this tool is subject to our Privacy Policy and Terms of Service. By proceeding, you acknowledge that you have read and agree to these terms.
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