You’re right that most parts of a Term Sheet are often stated not to be legally binding. However, despite this it can be commercially and morally difficult to move away from anything set out in a signed Term Sheet – your investor has included the terms for a reason, and attempting to change these later on can be damaging to your relationship at this important early stage.
For these reasons, in our experience it is fairly rare to see a term in the final investment documents depart from the position shown in the Term Sheet.
Note that despite generally not being legally binding, a few sections of the Term Sheet will usually be expressly binding. This often covers exclusivity, confidentiality, costs and potentially a few other areas – watch out for these, and ensure you fully understand what you are committing to before signing (though this goes for all parts of the Term Sheet!).
We would always recommend that you take legal advice on a Term Sheet before signing.
For more information on term sheets, see I’ve got a Term Sheet, what’s next? Should I sign it?