Review of NVCA Model Legal Documents

Keith Strahan - Attorney comparison of NVCA Model Legal Docs to Founder Friendly Standard

How founder-friendly are they?

I led a study in 2019 where attorneys reviewed the six most popular startup financing documents—all of which were produced by investor-funded organizations. After pouring through 298 pages of legalese, the attorneys found the top six financing documents were, on average, only 38% compatible with Founder Friendly Standard. The NVCA Model Legal Documents were the least compatible with the Founder Friendly Standard. See for yourself by viewing our infographic where you can drill down and compare the term sheets.

Review written by Keith Strahan, Managing Partner at Fulton Strahan Law Group, on Oct 14, 2019.

NVCA Model Legal Documents can be very time-consuming and expensive to negotiate and document. They include 18 agreements. To write this answer, my associate, Josh Mathews, and I reviewed the following six documents:

  1. NVCA Voting Agreement
  2. NVCA Term Sheet
  3. NVCA Stock Purchase Agreement
  4. NVCA Right of First Refusal and Co-Sale Agreement
  5. NVCA Investor Rights Agreement
  6. NVCA Certificate of Incorporation

To write this review, we started with each issue in the Founder Friendly Standard and compared it to the NVCA Model Legal Docs.

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