A good introduction is only the first step. Between two parties shaking hands and a deal that actually closes sits a short, well-trodden sequence of documents. Knowing what each one commits you to keeps the process clean and keeps everyone — investor, sponsor and introducer — protected.
Step 1 — protect the conversation
Before anything sensitive is shared, the parties put an Investor–Sponsor NDA in place. It lets the sponsor open the data room and the investor reveal its mandate, with both sides' information ring-fenced to the purpose of evaluating the opportunity. If an introducer made the connection, the NDA should expressly preserve their position.
Step 2 — record the introduction
Where the introduction is made on a success-fee basis, an Introduction Agreement records the scope of the introduction and the fee that becomes payable if a transaction completes. The two clauses that matter most are the tail period (the window after the introduction during which a completed deal still earns the fee) and anti-circumvention (so the deal cannot simply be re-routed to avoid the fee).
Step 3 — diligence
With confidentiality in place, the investor runs its diligence: the model, the licences, ZIDA registration, the team, the offtake. Where an adviser is brought in to run a workstream, an engagement letter sets the scope and fees. Nothing here is binding on the investment itself — either side can still walk away.
Step 4 — the term sheet
If diligence goes well, the parties record the headline terms in a term sheet: the amount, the valuation, the instrument and the governance the investor expects. Crucially, most of a term sheet is non-binding — it is subject to contract and to final documents. A few clauses are usually binding even at this stage: exclusivity, confidentiality and costs. Mark clearly which is which.
What is binding, and when
- The NDA is binding from signature — confidentiality is real immediately.
- The introduction agreement is binding — the fee obligation, including the tail, survives.
- The term sheet is mostly non-binding, except the clauses expressly stated to be binding (typically exclusivity, confidentiality and costs).
- The investment itself only becomes binding in the definitive transaction documents that follow.
Each document in this chain is available as a fillable template. They are starting points; the warranties, conditions and fee mechanics in a real deal should be tailored with qualified counsel before signing.