The answer really depends on the circumstances. When a startup is seeking a traditional round of funding from a VC with a lead investor, typically the lead investor generates a term sheet for the startup to review, negotiate and sign.
On the flip side, when a startup is doing a rolling closing with multiple small angel investors (often convertible debt), the company typically generates a term sheet and shows it to the early angels to get some consensus around the terms before legal counsel drafts the documents. It is not common (in my experience) that angels generate term sheets in this type of situation. While this type of funding is not new, it has been recently popularized by AngelList, Y Combinator and others.
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