Free Fundraising & Equity generator
Series Seed Preferred Term Sheet
A clean, founder-readable Series Seed term sheet covering price, valuation, liquidation preference, board, protective provisions, pro-rata, and standard NVCA-style terms, most of them non-binding.
What is a Series Seed Preferred Term Sheet?
A Series Seed Preferred Term Sheet is a founder-readable summary of a priced seed round. It covers price, valuation, liquidation preference, board, protective provisions, pro-rata, and the standard NVCA-style terms, most of them non-binding.
Founders and lead investors negotiating a priced seed round. It is the deal summary you agree on before lawyers draft the full financing documents, and it carries a plain-language column beside the key terms.
Series Seed Preferred Term Sheet template, current for 2026
A non-participating 1x preference is the default, the lead gets a single board seat without investor control of the board, the protective-provisions list is kept short, pro-rata runs to major investors only, and each term is labeled binding or non-binding. The form follows current market norms (broad-based weighted-average anti-dilution, no full ratchet) and adds a QSBS-friendly issuance note.
How HDAi does this differently
Unlike a static form, HDAi runs a guided interview and assembles your Series Seed Preferred Term Sheet as you answer. When you want it finished, a licensed Hart David Carson attorney reviews it and tailors it to your facts before you sign. The interview and the first draft are automated. The judgment belongs to an attorney.
What you’ll be asked
A short interview in plain language that asks only what this document needs.
- What is the full legal name of the Company issuing the Series Seed Preferred? This is the entity being financed; it appears throughout as the issuer of the stock and the counterparty to investors.
- What type of entity is the Company? Venture preferred stock financings almost always use a C-corp; the structure of the term sheet assumes one. Delaware is the market default.
- State of incorporation Governs the charter amendment, protective provisions, and default corporate law; investors expect Delaware.
- What should this round be called? Names the series of preferred stock and titles the deal; used in the charter and stock purchase documents.
- Is this a priced equity round or a convertible/SAFE bridge that this term sheet describes? Tells us if the term sheet must address conversion of prior SAFEs or notes into this round.
- Who is the lead investor (if any)? The lead typically negotiates terms, may take the board seat, and anchors the round; leave blank for a party round with no single lead.
- List any other named investors and their expected commitments. Identifies additional purchasers so the term sheet can reflect the full syndicate; used in the investment amount and closing mechanics.
- Total amount to be raised in this round (USD) The aggregate new-money investment; drives ownership math alongside valuation.
- Is the valuation expressed pre-money or post-money? Pre- vs. post-money changes how much of the company the round buys; the term sheet states which was negotiated.
- Valuation amount (USD) matching the basis above With the total raise, this sets the price per share and investor ownership percentage.
- Price per share of the Preferred (USD), if already computed The Original Issue Price anchors the liquidation preference, conversion price, and anti-dilution; leave blank if to be set at closing based on the fully-diluted cap.
- Post-closing unallocated option pool, as a percentage of fully-diluted capitalization The pool is typically created/topped-up in the pre-money, which dilutes founders; investors expect it sized before their money goes in.
- Liquidation preference multiple The multiple of invested capital returned first on a sale or liquidation; 1x non-participating is the clean market norm.
- Is the preference participating or non-participating? Non-participating is founder-friendly and standard for seed; participation lets investors take their preference and also share in the upside.
- If participating with a cap, the cap as a multiple of the original investment Caps total participation return; only relevant if you chose participating-with-a-cap.
- Dividend treatment on the Preferred Seed rounds almost always use non-cumulative dividends only if declared; cumulative dividends increase the effective preference over time.
- Stated dividend rate (% of Original Issue Price per year) Sets the dividend reference rate; even non-cumulative dividends state a rate for pro-rata priority over common.
- Anti-dilution protection Adjusts the conversion price if a later round prices below this one; broad-based weighted average is the market norm.
- Total number of board seats after closing Frames board control; the composition below must add up to this number.
- Describe the post-closing board composition. Specifies who elects each seat (founders, preferred, and any independent). This is the core control term.
- Name or designation of the investor board seat (if applicable) Identifies the preferred-elected seat so the governance section is concrete.
- Which actions should require Preferred approval (protective provisions)? These are the veto rights the Preferred holds as a class; the list defines the balance of control on major decisions.
- If indebtedness is a protective provision, the dollar threshold above which approval is required Sets the debt ceiling that triggers investor consent; only used if you selected the indebtedness veto.
- Do investors get pro-rata (preemptive) rights on future rounds? Lets investors maintain ownership by participating in future financings; standard, often limited to 'major' investors above a threshold.
- If pro-rata is limited to major investors, the minimum investment to qualify (USD) Defines who counts as a 'major investor' for pro-rata and information rights.
- Will investors receive information rights? Ongoing reporting obligations to investors; standard for priced rounds, often limited to major investors.
- Grant the Preferred registration rights (demand, S-3, and piggyback) in the Investors' Rights Agreement? Registration rights let investors require the Company to register their shares for resale after an IPO. Even where deferred to a later round, this line is included so no standard NVCA term is silently omitted.
- Will the Preferred carry redemption rights? A redemption right lets investors require the Company to buy back their shares after a set date. Uncommon at seed; the term is included so its presence or absence is explicit rather than omitted.
- Include a directors' and officers' insurance and indemnification covenant? Commits the Company to obtain D&O liability insurance and to indemnify directors to the fullest extent of the law; expected once an investor takes a board seat.
- Include a Qualified Small Business Stock (Section 1202) representation and covenant? Adds a 2026-current QSBS clause: the Company is a domestic C-corporation, the stock is issued for money, gross assets are within the Section 1202 ceiling, and the Company will use commercially reasonable efforts to maintain qualified-small-business status. References the OBBBA tiered 50/75/100% exclusion for stock acquired after July 4, 2025 and the increased caps.
- Illustrative minimum aggregate gross IPO proceeds for automatic conversion (USD) The Preferred converts automatically on a qualifying IPO above this proceeds floor. A common illustrative figure is $50,000,000; adjust to the deal.
- Illustrative minimum IPO price per share for automatic conversion (USD) The qualifying IPO must also price at or above this per-share floor (often a multiple of the Original Issue Price).
- Require executed CIIA / invention-assignment agreements from all founders and key employees as a closing condition? Conditions closing on each founder and key employee having signed the Company's confidential information and invention assignment agreement, assigning IP to the Company. Standard investor diligence protection.
- Will founder shares be subject to vesting as a condition of the round? Investors typically require unvested founder equity to keep founders committed; four-year monthly vesting with a one-year cliff is standard.
- Describe the custom founder vesting schedule and any acceleration. Captures nonstandard vesting or acceleration terms.
- Include a drag-along provision? Requires minority holders to go along with a company sale approved by the requisite majority; smooths future exits. The clause includes standard minority protections (same consideration, capped pro-rata indemnity with escrow, no forced non-competes on non-employees).
- Include a right of first refusal and co-sale on founder transfers? Controls secondary transfers of founder stock and lets investors tag along; standard in priced seed deals.
- No-shop / exclusivity period in days A binding period during which the company won't solicit competing financing offers; typically 30-45 days.
- Cap on investor legal-fee reimbursement paid by the Company (USD) The company usually reimburses the lead investor's counsel fees up to a cap at closing.
- Target closing date The date the parties plan to sign definitive documents and fund. It sets expectations rather than a hard deadline.
- Governing law for the definitive documents The state law that will govern the stock purchase agreement and related documents; usually the state of incorporation.
- Name of the person signing for the Company Appears in the signature block as the Company's authorized representative.
- Title of the Company signatory Confirms signing authority in the signature block.
- Date this term sheet expires if not accepted Sets a deadline for the investor to accept; keeps the offer from lingering open-ended.
Frequently asked
About the Series Seed Preferred Term Sheet and how HDAi works.
What is a Series Seed Preferred Term Sheet? +
A Series Seed Preferred Term Sheet is a founder-readable summary of a priced seed round. It covers price, valuation, liquidation preference, board, protective provisions, pro-rata, and the standard NVCA-style terms, most of them non-binding. Founders and lead investors negotiating a priced seed round use it as the deal summary they agree on before lawyers draft the full financing documents, and it carries a plain-language column beside the key terms.
Is HDAi's Series Seed Preferred Term Sheet legally binding? +
A term sheet is generally non-binding on the economic terms and binding only in the provisions it marks as binding, typically confidentiality, exclusivity, expenses and governing law. The definitive agreements that follow are what bind the parties; have a licensed Hart David Carson attorney draft or review those before you sign.
Do I need a lawyer to use this Series Seed Preferred Term Sheet? +
You can generate and download the Series Seed Preferred Term Sheet in minutes, free of charge. A licensed Hart David Carson attorney can then review it and tailor it to your facts before you sign, which is the part no template can do.
What makes this Series Seed Preferred Term Sheet current for 2026? +
A non-participating 1x preference is the default, the lead gets a single board seat without investor control of the board, the protective-provisions list is kept short, pro-rata runs to major investors only, and each term is labeled binding or non-binding. The form follows current market norms (broad-based weighted-average anti-dilution, no full ratchet) and adds a QSBS-friendly issuance note.
How long does the Series Seed Preferred Term Sheet take? +
Estimated time about 22 min (44 questions), depending on how much you already know. The document assembles as you answer. Export it as PDF or Word, or send it to a Hart David Carson attorney for review.
Does this Series Seed Preferred Term Sheet work in my state? +
HDAi's interview is state-aware. If you ask an attorney to finish the draft, a licensed Hart David Carson attorney confirms it against your state's requirements before you rely on it. Validity and required formalities vary by state.
Fundraising & Equity
Related generators
KISS-Style Convertible Instrument (Debt or Equity) · Series Seed Stock Purchase Agreement · Convertible Promissory Note · Equity Incentive Plan + Stock Option Grant + Early-Exercise Notice · All 124 →