Flutterby™! : NVCA Model Financing Documents

Wow. Just because I'm constantly involved in discussions about new companies, I think this is going to end up chewing quite a bit of reading time. Over at VentureBlog, David Hornik linked (with worthwhile commentary) to the NVCA Model Financing Documents.

Annually, our industry closes several thousand financing rounds, each consuming considerable time and effort on the part of investors, management teams and attorneys. A conservative estimate is that our industry spends some $200 million in direct legal fees annually to close private financing rounds. In an all-too-typical situation, the attorneys start with documents from a recent financing, iterate back and forth to get the documents to conform to their joint perspective on appropriate language (reflecting the specifics of the deal and general industry best practices), and all parties review many black-lined revisions of the documents, hoping to avoid missing important issues as the documents ooze to their final form. In other words, our industry on a daily basis goes through an expensive and inefficient process of "re-inventing" the flat tire."

This is an attempt to give everyone a common baseline.