No-Shop Clause
Definition
A no-shop clause in a term sheet forbids the company from soliciting or negotiating competing offers for a set period, typically 30 to 60 days, while the investor completes diligence.
How it comes up in fundraising
Signing a term sheet with a no-shop effectively ends your process; get competing term sheets on the table before signing, not after.
Frequently asked questions
Are no-shop clauses negotiable?
The duration is: shorter windows (30 days) protect founders from being tied up by a slow investor.
Is the term sheet itself binding?
Mostly not, except clauses like no-shop and confidentiality; the economic terms bind only at closing documents.
Cite this term
Round Funded. "No-Shop Clause." Startup Fundraising Glossary.
Stable URL, it will not change: https://www.roundfunded.com/en/glossary/no-shop-clause
Related terms
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