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An Investment agreement term sheet outlines the key points of a potential investment deal before creating the full legal documents. It's like a blueprint that captures essential terms between investors and companies in Indonesia, covering things like valuation, ownership stakes, and voting rights.

Under Indonesian investment law, particularly Law No. 25/2007 on Investment, these term sheets help both local and foreign investors move deals forward efficiently. While not legally binding (except for confidentiality clauses), they save time and money by getting everyone aligned on major points early. Most Indonesian startups and growing companies use them when negotiating with venture capital firms or angel investors.

Use an Investment agreement term sheet when you're ready to seriously negotiate investment terms but want to avoid costly legal documentation before reaching initial agreement. It's especially valuable when dealing with foreign investors under Indonesia's Investment Law, as it helps establish clear expectations about ownership structures, board rights, and exit provisions.

The right time is typically after preliminary discussions but before due diligence begins. This approach works particularly well for Indonesian startups seeking venture capital, as it lets both parties confirm key terms like valuation, investment schedule, and governance rights before spending resources on detailed legal agreements and regulatory compliance.

• Equity Investment Term Sheet: Used for direct stock purchases, detailing share class, voting rights, and board seats. Common in Indonesian tech startups seeking venture capital.
• Convertible Note Term Sheet: Outlines debt that converts to equity, specifying interest rates and conversion triggers. Popular with early-stage companies needing quick funding.
• Strategic Investment Term Sheet: Focuses on partnerships beyond money, including technology transfers and market access rights under Indonesian investment laws.
• Asset-Based Term Sheet: Details investment terms for specific assets or projects, common in Indonesia's infrastructure and real estate sectors.

• Startup Founders: Draft and negotiate Investment agreement term sheets when seeking funding, often working with their legal teams to protect company interests.
• Venture Capital Firms: Present and negotiate terms with Indonesian startups, typically through their investment committees and legal counsel.
• Corporate Investors: Use term sheets when making strategic investments in Indonesian companies, especially in regulated sectors.
• Legal Counsel: Review and refine term sheets to ensure compliance with Indonesian investment laws and protect client interests.
• Investment Banks: Often facilitate larger deals, helping structure terms between foreign investors and local companies.

• Company Information: Gather current capitalization table, financial statements, and business registration details under Indonesian law.
• Investment Details: Define investment amount, valuation, ownership percentages, and any tranching schedule.
• Governance Rights: Outline board composition, voting thresholds, and veto rights aligned with Indonesian corporate governance rules.
• Exit Provisions: Specify drag-along rights, tag-along rights, and transfer restrictions.
• Compliance Check: Review Investment Coordinating Board (BKPM) regulations and foreign ownership restrictions for your sector.
• Documentation: Use our platform to generate a legally-sound term sheet that includes all mandatory elements under Indonesian law.

• Investment Structure: Clear details on investment amount, valuation, and ownership percentages per Indonesian investment regulations.
• Investor Rights: Specifications for board representation, voting rights, and information access rights.
• Protection Clauses: Anti-dilution provisions, pre-emptive rights, and transfer restrictions aligned with Indonesian Company Law.
• Exit Mechanisms: Terms for IPO, trade sale, or other liquidity events under BKPM guidelines.
• Confidentiality: Binding confidentiality provisions protecting both parties' information.
• Governing Law: Explicit statement choosing Indonesian law and jurisdiction.
• Non-Binding Statement: Clear indication that only confidentiality and exclusivity provisions are binding.

An Investment agreement term sheet differs significantly from a full Investment Agreement in several key ways. While both documents are crucial in Indonesian investment transactions, they serve distinct purposes and carry different legal weights.

• Legal Binding: Term sheets are mostly non-binding (except for confidentiality clauses), while Investment Agreements are fully binding legal contracts.
• Detail Level: Term sheets provide a high-level outline of key terms, while Investment Agreements contain comprehensive legal provisions and precise obligations.
• Timing: Term sheets come first during negotiations, serving as a roadmap for the detailed Investment Agreement that follows.
• Complexity: Term sheets are shorter and simpler, focusing on commercial terms, while Investment Agreements include extensive legal protections and regulatory compliance details under Indonesian law.