A short, mostly non-binding summary of the terms of a proposed investment, signed before the full legal documents are drafted.
Non-binding in the sense that it does not compel the investment. In practice, terms agreed here are very hard to move afterwards — renegotiating a term sheet clause during documentation costs goodwill and time you don't have.
The valuation is the number everyone looks at and rarely the term that matters most. Liquidation preference, board composition, pro-rata rights and protective provisions determine what actually happens in the outcomes that aren't a clean success.
Some clauses genuinely are binding — exclusivity and confidentiality typically are. Read which ones before signing, because exclusivity stops you talking to anyone else while diligence runs.
Project types where this term stops being vocabulary and starts being a decision you have to make.