Securing investment is a make-or-break moment for any founder. When an investor finally makes a formal offer—the term sheet—founders need a benchmark to assess fairness.

The 2026 Venture Capital Term Sheet Guide from HSBC Innovation Banking reveals that the UK funding landscape is split between AI and deeptech companies, which are attracting more investor interest and receiving founder‑friendly terms, while businesses in other sectors face stricter conditions. The guide also highlights the importance of due diligence on valuation, market size, IP, team, and exit potential.

Investors are funneling capital into a smaller pool of high‑growth firms. Larger deals now account for 31% of all term sheets, up from 26% in 2024, underscoring the growing premium on standout startups.

Startups must benchmark against these trends, negotiate for equity, valuation caps, and protective provisions that match the prevailing market data. Reviewing recent deals, understanding typical valuation multiples, and assessing protective clauses such as liquidation preferences and board control are essential steps.