Deeptech term sheets in 2026 favor some UK founders, HSBC guide says

Deeptech term sheets 2026 are becoming more favorable for some UK founders as investors compete for scaled companies and businesses in AI-adjacent sectors, according to HSBC Innovation Banking’s latest guide. The shift matters because a higher valuation can still come with exit economics and governance rights that constrain founders long after a round closes.

HSBC said Series B and later rounds accounted for 31% of term sheets in 2025, up from 26% in 2024. The bank characterized that increase as a concentration of capital in fewer, more mature companies, alongside higher late-stage valuations, less deal structuring and more founder-friendly terms. Its guide is based on anonymised completed-deal data submitted by UK and international venture law firms, covering seed through Series C-plus rounds, as well as a separate investor sentiment survey.

That is not evidence that every deeptech startup can dictate terms. The data is UK-specific, the sector detail remains broad, and HSBC is both the report’s publisher and sponsor of a related Sifted interview. Still, the guide said activity in emerging deeptech-focused categories reached 35%, from 15% in 2021, particularly in cybersecurity, energy, HardTech and CleanTech. Fintech and life sciences also remain major UK investment categories.

How should deeptech founders compare term sheets in 2026?

Start with the competitive position of the financing. In the Sifted interview, GeoSurge cofounder and chief executive Francisco Vigo said competing offers improved his company’s ability to negotiate; GeoSurge recently closed a $12 million seed round. Multiple credible term sheets give a founder more room to compare price, governance and closing conditions. One offer with a short runway produces a different negotiation.

A term sheet is a preliminary outline of an investment, generally non-binding until definitive agreements are signed. It establishes the commercial framework for later documents, while provisions such as confidentiality or exclusivity may carry obligations during the process, according to Silicon Valley Bank.

• Cash, valuation and ownership: Compare the investment amount, any minimum amount required to close, valuation and resulting dilution together.
• Exit economics: A liquidation preference determines who gets paid first in an exit or wind-down. HSBC’s Glen Waters said a headline valuation can be paired with protections designed to secure an investor’s return. Founders should establish whether the preference is participating or non-participating, its multiple and any accrued return.
• Future-round rights: Review anti-dilution, pro rata and pay-to-play provisions. Anti-dilution can provide an investor additional shares in a lower-priced financing, SVB says.
• Control: Map board seats, voting thresholds and investor consent rights against actual operating decisions. Sifted reported Waters’ warning that enhanced investor voting or board control can be triggered by financial distress, missed budget milestones or insolvency.
• Founder protections: Negotiation objectives can include a brief no-shop period, a high drag-along threshold requiring founder and investor consent, and accelerated vesting if founders are dismissed after an acquisition.

Location can also affect the deal. HSBC said more than half of Energy/CleanTech and Life Sciences deals across stages are now financed in UK regions, but some regions show greater use of participating preferences. The report links that pattern to lower competitive tension and more limited capital availability.

Signing does not guarantee funds. Subsequent diligence and definitive documentation remain material, so founders should disclose unusual cap-table arrangements, founder payments, vesting gaps and other material issues early. A fair comparison is therefore a worksheet of the headline offer and the actual deal: price, cash, preference, dilution, board and consent rights, vesting, drag and no-shop terms, and conditions to close. Founders should obtain legal and other professional advice for their own circumstances.

This story draws on original reporting from Sifted.