Nigeria’s venture capital and growth equity market is entering a pivotal phase. As capital inflows deepen and transaction sizes increase, the term sheet has moved beyond a preliminary commercial summary to become the foundational legal instrument structuring startup financing. Yet it is frequently misunderstood by founders and, at times, treated as a procedural formality rather than the document that allocates control, economics, and exit outcomes well before definitive agreements are executed. In this environment, the primary strategic risk is no longer access to capital, but whether founders and their advisers fully understand the legal architecture embedded in the initial transaction documents they accept.

This article provides a doctrinal and transactional analysis of the term sheet in Nigerian venture transactions, grounded in the Companies and Allied Matters Act 2020 and informed by comparative practice in the United Kingdom, Singapore, and South Africa. It examines seven provisions that are central to venture deal dynamics—valuation mechanics, liquidation preferences, anti-dilution protections, governance rights, vesting structures, exit rights, and transfer restrictions—and demonstrates how ostensibly “standard” terms can materially reallocate risk, value, and control. The objective is not to undermine legitimate investor protections, but to recalibrate them through precise drafting, informed negotiation, and legal realism, thereby equipping founders, investors, and advisers to structure sustainable, dispute-resilient venture transactions in Nigeria’s evolving capital market.