Outside Publication

Evolving Market Terms for Venture Capital Investments: Trade Association Updates Standards, New Jersey Lawyer

August 2021

On July 28, 2020, the National Venture Capital Association, the trade association for the venture capital community in the United States, published much-anticipated updates to its model legal documents, which are available for free download on the NVCA’s website. These documents are widely used in the venture capital and angel investment communities and have become the industry standard for use by lawyers representing emerging growth companies and investors to effectively and efficiently document the terms of equity financings.

This article summarizes the updates to the primary model legal documents, which include a Term Sheet, Certificate of the Incorporation, Stock Purchase Agreement, Investor’s Rights Agreement, Voting Agreement, and Right of First Refusal and Co-Sale Agreement. The NVCA model documents assume the company is organized as a corporation, although thy are adaptable for other applications.

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