As a follow-up to my previous blog, there are many sources of Venture Capital (VC) equity financing documents and information available on-line. Here are my favorites.
1. TechStars Model Seed Funding Documents (Techstars.org)
There are five primary documents in the set:
2. Wilson Sonsini Term Sheet Generator
The Wilson Sonsini law firm has a term sheet generator. The website describes itself as:
“This tool will generate a venture financing term sheet based on your responses to an online questionnaire. It also has an informational component, with basic tutorials and annotations on financing terms. This term sheet generator is a modified version of a tool that we use internally, which comprises one part of a suite of document automation tools that we use to generate start-up and venture-financing-related documents.”
You need to go through the exercise to generate the forms.
3. Wilson Sonsini Series AA equity financing documents
Wilson Sonsini Series also offers a series of AA equity financing documents on ycombinator.
4. Veri course on Understanding Term Sheets
Veri offers an on-line course called Understanding Term Sheets.
I welcome comments and additions to this list.
If you are going to obtain VC financing, I strongly recommend that you use an attorney experienced in this area. I do not recommend that people use legal forms in lieu of legal counsel. Legal forms are good for giving you a sense of how the documents might look and what language is typical. And they can be a good starting point for drafting purposes. But they should not be used as is. Every situation is different and only a good attorney can assess how well a particular legal form will work for you, what language might need to be changed, and what additional language should be added.
And consider using two attorneys, one for the company and another for the founders. In some cases it would be best if each founder had their own attorney. The interests of the founders are closely aligned with the interests of the company, but they are not always the same. Often the VC will direct the company to use a law firm that has worked with the VC on funding many other startups. This law firm may not keep the best interests of the founders in mind.