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by Undo Capital
December 15, 2025
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What are Heads of Terms?

Heads of Terms is a non-binding document that outlines the key commercial terms agreed in principle between parties before full legal contracts are drafted.

Heads of Terms Meaning

The heads of terms mean centres on early-stage alignment. To define heads of terms in practice, it summarises the core deal points such as valuation, investment amount, share class, investor rights, timelines and any key conditions. A clear heads of terms definition helps both sides confirm that they are aligned on the main commercial structure before committing time and cost to detailed legal documentation. While usually not legally binding, certain clauses, such as confidentiality or exclusivity, may still have legal force. Heads of terms stand for clarity, speed and reduced risk of misunderstandings later in the deal.

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Disclosure Notice: This communication is issued by Undo Capital Limited (“Undo Capital”) and is provided strictly for informational purposes only. It contains general information and should not be relied upon as accounting, business, financial, investment, legal, tax, or other professional advice. Undo Capital is not regulated by the Financial Conduct Authority (FCA) and does not provide investment, financial, or tax advice. Our services are designed to assist startups and businesses with company formation, legal agreements, and funding-related documentation. Nothing in this communication constitutes, or should be construed as, a recommendation, offer, or solicitation to purchase or sell any security or financial instrument.
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Disclaimer: Our services are designed to assist startups and businesses with company formation, legal agreements, and funding-related documentation. We do not provide investment advice, financial advice, or tax advice, nor are we regulated by the Financial Conduct Authority (FCA). Participating in startups and early-stage enterprises carries inherent risks, including limited liquidity, absence of dividends, potential loss of investment, and dilution. Any decisions regarding investments should be made independently by the investor as part of a well-diversified portfolio.