RetailEye specializes in AI image processing, allowing brand owners to monitor product displays in retail stores. In October 2020, RetailEye's founders sought Series A funding from venture capital (VC) firms and received two financing offers, known as term sheets. They needed to decide which term sheet to accept and how to approach negotiations with the VCs.

The case includes two term sheets, which are representative of actual VC negotiations in China. Additionally, it provides background information on RetailEye's positioning within China's retail industry, helping assess its growth potential and competitive advantage against rivals. The case focuses on three key aspects of term sheet negotiations: (1) the startup's value-creation potential; (2) the allocation of equity stakes and types of securities that VCs receive in return for their investment; (3) the design of a rational negotiation strategy.