Leave it to a savvy law firm headquartered in the heart of Silicon Valley to develop an online tool that actually generates draft financing term sheets for startups using the simplicity of a web-based questionnaire.

The so-called “Term Sheet Generator” comes courtesy of Wilson Sonsini Goodrich & Rosati, a Palo Alto-based firm that’s played legal adviser to the likes of Apple and Sun Micro. It works with the responses and information provided by users to build fully formatted term sheet documents that can help entrepreneurs seeking outside capital get the ball rolling.

As Startup CFO blogger Mark Macleod astutely points out, the tool is no replacement for the advice of a skilled lawyer but can help cut costs when pondering early round funding. This is a sentiment shared by WSGR, which notes in the user terms and conditions that the service is “for general informational purposes only” and does “not constitute advertising, a solicitation or legal advice.”

The tool also offers up tutorials and annotations on terms for those who may be new to the world of financing, as well as market data that is worked into the standardized answer options of some of the more than 100 questions.

VC-blog altgate, which has a review of the generator and a sample term sheet, agrees that it’s a useful tool and reports that it’s but one of a slew of document generators WSGR plans to make publicly available on the web.

Let’s hope they also carry the lovely price-tag of $0.

(Photo: An attendee works on a computer at the 2009 Milken Institute Global Conference in Beverly Hills, California April 28, 2009. REUTERS/Phil McCarten)