EXHIBIT 10.4

                                   TERM SHEET

THIS TERM SHEET DATED DECEMBER 20, 2004 (THE "TERM SHEET")  SUMMARIZES THE BASIC
TERMS AND  CONDITIONS ON WHICH COMVEST  INVESTMENT  PARTNERS II LLC  ("COMVEST")
PROPOSES TO INVEST $5,000,000 OF FINANCING CONSISTING OF COMMON STOCK, FINANCING
WARRANTS AND PROTECTION  WARRANTS (THE  "FINANCING") IN CORVU  CORPORATION  (THE
"COMPANY").

THIS TERM SHEET IS NOT A COMMITMENT BY COMVEST TO CONSUMMATE THE  FINANCING;  IT
IS FOR  DISCUSSION  PURPOSES  ONLY  EXCEPT AS SET FORTH  BELOW,  AND COMVEST MAY
TERMINATE DISCUSSIONS AT ANY TIME WITHOUT LIABILITY OR OBLIGATION TO COMVEST.

--------------------------------------------------------------------------------

FINANCING


FINANCING TERMS:  The Financing shall be in the form of a $5,000,000 equity
                  investment.  In consideration  for the Financing,  the Company
                  shall issue to ComVest,  or a  subsidiary  of ComVest,  at the
                  closing,  (i)  20,000,000  shares  of  Common  Stock  and (ii)
                  warrants  to  purchase  a number of  shares  of the  Company's
                  Common Stock equal to 30% of the number of shares purchased on
                  the terms set forth below (the "Financing  Warrants").  In the
                  event that the acquisition previously identified to ComVest by
                  the Company  (the  "Acquisition")  has not closed prior to the
                  closing of the  Financing,  then ComVest shall only  initially
                  invest  $2,500,000 for (i)  10,000,000  shares of Common Stock
                  plus (ii) Financing  Warrants to purchase  3,000,000 shares of
                  the Company's Common Stock on the terms set forth herein,  and
                  the balance of $2,500,000  for the  remaining  (i)  10,000,000
                  shares  of  Common  Stock  plus  (ii)  Financing  Warrants  to
                  purchase  3,000,000 shares of the Company's Common Stock shall
                  be invested on the terms set forth herein  simultaneously with
                  the  closing  of the  Acquisition.  Any  shares  purchased  by
                  ComVest  under the terms and  conditions  set forth herein are
                  referred to as "Shares."


                  In  addition  to the Shares and the  Financing  Warrants,  the
                  Company  shall issue to ComVest  warrants to purchase a number
                  of shares of the  Company's  Common Stock equal to ten percent
                  (10%) of the number of shares purchased on the terms set forth
                  herein (the "Protection Warrants").


                  It is expected  that the closing of the  Financing  will occur
                  within 30-45 days from the signing of this Term Sheet.


TERMS  OF THE  FINANCING
WARRANTS AND PROTECTION
WARRANTS:

                  The  Company  shall  issue  five-year  Financing  Warrants  to
                  purchase  a number of shares of Common  Stock  equal to 30% of
                  the number of Shares,  and  five-year  Protection  Warrants to
                  purchase  a number of shares of Common  Stock  equal to 10% of
                  the number of Shares,  both Financing  Warrants and Protection
                  Warrants having an exercise price equal to $.50 (the "Exercise
                  Price").  The  shares to be  issued  upon  such  exercise  are
                  hereinafter  referred to as the Warrant Shares.  The Financing
                  Warrants  and  the  Protection   Warrants  shall  contain  (a)
                  cashless    exercise    provisions   and   (b)    full-ratchet
                  anti-dilution  with  regard  to  the  Exercise  Price,  but no
                  anti-dilution  adjustment with regard to the number of Warrant
                  Shares,  and  other  standard  anti-dilution   protection  for
                  issuances  below  the  Exercise  Price,  provided,  that  only
                  issuances  for fair value  agreed upon by the  majority of the
                  Company's  entire  board of  directors  in the exercise of the
                  directors'  fiduciary  duties may  trigger  any  anti-dilution
                  protection;  further  provided,  that the following  issuances
                  will not trigger any anti-dilution  protection:  (i) issuances
                  of shares of Common Stock upon  exercise of options,  warrants
                  or  other  stock   purchase   rights  or   conversion   rights
                  (including,  but not limited to, issuances of shares of Common
                  Stock upon conversion of Series B Preferred Stock) outstanding
                  at the time of the signing of this Term Sheet;  (ii) issuances
                  of options,  restricted stock,  stock  appreciation  rights or
                  other awards granted and to be granted to employees, officers,
                  directors and  consultants of the Company  pursuant to a stock
                  option plan  approved by a majority  of the  Company's  entire


<PAGE>

                  board of  directors  and  issuances  of shares of Common Stock
                  upon exercise of such awards in  accordance  with the terms of
                  such  plan;   (iii)  issuances  in  connection  with  mergers,
                  acquisitions,  joint  ventures or other  transactions  with an
                  unrelated  party in a bona fide  transaction  the  purpose  of
                  which is not fundraising;  (iv) issuances at fair market value
                  to the Company's suppliers, consultants and other providers of
                  services and goods not to exceed $100,000 to any one person or
                  entity,  and not to exceed an aggregate  of  $250,000,  in any
                  fiscal  year  without the prior  consent of  ComVest;  and (v)
                  issuances  of options  (the  "Replacement  Options") to Justin
                  MacIntosh  at the then fair  market  value in  replacement  of
                  options  held by Mr.  MacIntosh  at the time of the closing of
                  the Financing upon their expiration and issuances of shares of
                  common stock upon  exercise of any such  Replacement  Options,
                  provided,  that such Replacement  Options have to be issued in
                  accordance  with the Company's then existing stock option plan
                  and  approved by the  majority of the  Company's  Compensation
                  Committee and by the Company's Board of Directors.


                  In addition,  the Protection Warrants shall become exercisable
                  only if (a)  ComVest  owns more than  5,000,000  shares of the
                  Company's  Common  Stock and (b) less than two  Designees  (as
                  that term is  defined  below) of  ComVest  are  members of the
                  Company's  Board of  Directors  despite the  Designees  having
                  voted  for  their  own   nomination   or  the   nomination  of
                  replacement  Designees and despite ComVest having voted all of
                  its shares in favor of the  election of the  Designees  to the
                  Company's Board of Directors.


MISCELLANEOUS TERMS:


Registration  Rights:  Two demand  registration  rights and unlimited  piggyback
                       registration rights.


<PAGE>

Board Composition:      ComVest  will have the right to  designate
                        two  representatives for election to the Company's Board
                        of Directors (the "Designees"),  both of which shall not
                        have been  involved  in any of the  events  set forth in
                        Item 401(f) of Regulation  S-K during the last ten years
                        and  shall  be  qualified  to serve  as  directors  of a
                        reporting  company under the Securities  Exchange Act of
                        1934, as amended,  according to the  assessment  made by
                        the  Company's  Governance/Nominating  Committee  and at
                        least one of which shall satisfy the Nasdaq requirements
                        as  an  "independent"   director.   Such   "independent"
                        director Designee shall be appointed to the Compensation
                        Committee,  and any future increases in the compensation
                        of the CEO, or additional grants of options, to the CEO,
                        shall  only be  approved  by  unanimous  consent  of the
                        Compensation  Committee except as otherwise  provided in
                        this Term Sheet with  regard to  Replacement  Options to
                        Justin MacIntosh.  The Company will use its best efforts
                        to have the Designees nominated and elected to the Board
                        of Directors.

Pre-emptive  Rights:    In the event that the Company shall seek
                        to issue any additional  shares of Common Stock or other
                        securities  convertible  into or exchangeable for shares
                        of Common  Stock,  at a time when ComVest owns more than
                        5,000,000  shares of the Company's  Common  Stock,  then
                        ComVest  shall have the right to purchase such number of
                        securities  from the Company,  on the same terms as then
                        being offered by the Company, so as to maintain its then
                        percentage ownership in the Company.

Other Covenants:        The Company shall covenant for a period equal
                        to the shorter of (i) three years from the closing,  and
                        (ii) such  time as  ComVest  owns  less  than  5,000,000
                        shares of the Company's  Common  Stock,  not to issue or
                        sell any  shares  of  Common  Stock,  or any  securities
                        convertible or  exchangeable  into Common Stock,  for an
                        effective per share price of less than $.25, without the
                        prior approval of ComVest.

                        The   Company   shall   also  agree  not  to  incur  any
                        indebtedness  for  borrowed  money  other  than an asset
                        based senior line of credit  without the prior  approval
                        of ComVest.

                        ComVest  agrees not to undertake  any actions  involving
                        ComVest or another entity  affiliated with or controlled
                        by ComVest to take the Company private,  including,  but
                        not limited to, selling all or substantially  all of the
                        Company's  assets,  merging  the  Company,  or any other
                        transaction  with  similar  economic   effects,   unless
                        ComVest has received the prior written consent of Justin


<PAGE>

                        MacIntosh  to any such  proposed  actions,  it being the
                        understanding  of the parties  that ComVest is committed
                        in principle to continuing the Company's  operation as a
                        publicly held company.


Shareholders Agreement: Justin    MacIntosh    and   his affiliates(other  than
                        Avant  Air and his  wife  Delia  MacIntosh)  shall  have
                        entered into a shareholders  agreement with ComVest,  on
                        terms  acceptable to Mr.  MacIntosh  and ComVest,  which
                        provides that Mr.  MacIntosh and such  affiliates  shall
                        not sell or  otherwise  transfer  any of their shares of
                        Common Stock without offering ComVest the opportunity to
                        sell the same  percentage  number  of shares on the same
                        terms.  In addition,  Mr.  MacIntosh and such affiliates
                        will agree  that  until the Shares are fully  registered
                        and  freely  tradable,  he will not  sell,  transfer  or
                        otherwise dispose of any securities of the Company in an
                        open market trade.


CONDITIONS TO CLOSING:  Subject to the  satisfaction  of ComVest's due diligence
                        investigation   of  the  Company,   including,   without
                        limitation,    the   Company's   financial   statements,
                        projections, cash burn rate, business prospects, capital
                        structure, contractual arrangements, and other customary
                        conditions.


                        There   shall  be   outstanding   (i)  not   more   than
                        approximately  24 million shares of Common Stock and not
                        more  than  600,000   shares  of  Series  B  Convertible
                        Preferred   Stock;   (ii)  options  to  purchase  up  to
                        approximately 4.1 million shares of Common Stock granted
                        to employees  under the Company's  stock option plan and
                        options to  purchase  up to  approximately  1.4  million
                        shares of Common Stock  granted to employees  outside of
                        the  Company's  stock option plan,  at average  exercise
                        prices  ranging  from $.91 to $1.58,  (iii)  warrants to
                        purchase up to  1,400,000  shares of Common  Stock at an
                        exercise  price of $.20,  and (iv)  warrants to purchase
                        not more than  2,805,275  shares  of Common  Stock at an
                        average exercise price of $1.71. The number of shares of
                        Common Stock under (i) above does not include  shares of
                        Common Stock issued or to be issued to Justin  MacIntosh
                        and  members of his family upon  conversion  of Series B
                        Preferred  Stock and upon  conversion of their remaining
                        outstanding debt.


<PAGE>

                        There  shall be no debt  outstanding,  other than as set
                        forth in the Company's most recent public  filings,  and
                        accounts  payable,  trade  payables  and  capital  lease
                        obligations incurred in the ordinary course of business.

                        Justin  MacIntosh  and members of his family  shall have
                        converted  their shares of Series B Preferred Stock into
                        Common Stock,  and shall convert all of their  remaining
                        outstanding debt into the terms of this Financing.

                        The Company shall have  obtained key man life  insurance
                        on the life of Justin MacIntosh in the amount of between
                        $2,500,000   and   $5,000,000,   subject  to  reasonable
                        availability,  costs  and  terms  of such  insurance  as
                        approved by Justin MacIntosh.

                        The Company's  Board of Directors  shall have  increased
                        the number of  directors  by two and shall have  elected
                        the two Designees as additional directors.

                        There   being  no  material   adverse   changes  in  the
                        operations  or financial  situation of the Company or in
                        the capital or stock markets in general.


FEES:                   Upon the closing of the Financing, the Company shall pay
                        to ComVest a cash fee equal to $200,000,  which shall be
                        payable  pro  rata  at  each  closing   based  upon  the
                        percentage of the Financing completed at such closing.


RIGHTS UPON
TERMINATION:            Provided  that the Company is proceeding in good faith
                        at all times, including,  without limitation,  providing
                        all  due  diligence   materials  requested  by  ComVest,
                        ComVest shall have 45 days from the date hereof to close
                        the Financing.  In the event that the Company elects not


<PAGE>

                        to proceed with the Financing prior to such date without
                        cause,  or  fails  to  proceed  in good  faith,  then in
                        addition  to  any  reimbursement  of  actual  reasonable
                        out-of-pocket expenses, the Company shall pay to ComVest
                        a financial  advisory  and  structuring  fee of $500,000
                        which shall, at ComVest's  option, be payable in cash or
                        shares of Common Stock valued at $.25 per share.  In the
                        event  ComVest has informed the Company that it will not
                        close the Financing within 45 days after signing of this
                        Term Sheet,  or in the event  ComVest has not closed the
                        Financing and has not made its  investment in accordance
                        with the previous  terms within 45 days after signing of
                        this Term  Sheet,  despite  the  Company  acting in good
                        faith to close  the  Financing,  then the  terms of this
                        provision  will  expire  and  CorVu  will  not  have any
                        further obligations to ComVest under this Term Sheet.

The foregoing  Term Sheet when executed by the parties below shall  constitute a
letter of intent  between  ComVest  and the Company  and the  intention  by both
parties  (subject  to  the  completion  to its  satisfaction  of  ComVest's  due
diligence   review)   to  proceed   with  the   transaction   described   above.
Notwithstanding  the foregoing,  the provisions of the section  entitled "Rights
Upon Termination" above shall be a binding obligation of the Company. By signing
this Term Sheet,  the Company  represents  that the execution of this Term Sheet
does not  conflict  with any  other  agreement,  and  that  the  Company  is not
obligated  to pay any fee to any  other  person  or  entity  as a result  of the
Financing.  The validity and interpretation of this Term Sheet shall be governed
by New York law.

If the  foregoing  is  acceptable,  please sign a copy of this Term Sheet in the
space provided below and return the copy to the

undersigned  no later than  December 20, 2004.  If an executed  copy of the Term
Sheet is not  received  on or prior to such date,  this

Term Sheet shall be void and of no further force or effect.


                                              Very truly yours,

                                              ComVest Investment Partners II LLC



                                              By:  /s/ Michael Falk
                                                        Chief Executive Officer

Confirmed and Agreed To:

CorVu Corporation


By:      /s/ Justin M. MacIntosh
         Chief Executive Officer