In venture capital, a term sheet for a business agreement that may not be finalized. A term sheet is a preliminary agreement between a venture capital firm and a business it tends to finance, it out line the terms of what each party expect from the other, usually in a bullet point fashion.It is not usually binding. a term sheet may explode if either party back out of the deal and and the term sheet does not culminate in a financial contract between the venture capital firm and the business.