Model Venture Capital Documents & Intellectual Property Issues Present Challenges In Venture Capital Transactions

The National Venture Capital Association offers this
"’template’ set of model legal documents http://www.nvca.org/model_documents/model_docs.html for venture capital investments put together by a group of leading venture capital attorneys. The model venture capital financing documents consist of:

Term Sheet

Stock Purchase Agreement

Certificate of Incorporation

Investor Rights Agreement

Voting Agreement

Right of First Refusal and Co-Sale Agreement

Management Rights Letter

Indemnification Agreement

…The model documents aim to:

-reflect and in a number of instances, guide and establish industry norms

-be fair, avoid bias toward the VC or the company/entrepreneur

-present a range of potential options, reflecting a variety of financing terms

-include explanatory commentary where necessary or helpful

-anticipate and eliminate traps for the unwary (e.g., unenforceable or unworkable provisions)

-provide a comprehensive set of internally consistent financing documents

-promote consistency among transactions

-reduce transaction costs and time"

http://bizzbangbuzz.blogspot.com/2005/12/model-venture-capital-documents.html

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Intellectual Property Issues Present Challenges In Venture Capital Transactions

By Walter E. Daniels, Special To LTW

Editor’s note: Walter E. Daniels is a founder of and principal in the Research Triangle Park law firm of Daniels Daniels & Verdonik, P.A.

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RESEARCH TRIANGLE PARK, N.C. – Intellectual Property (“IP”) issues occur in three stages in most venture capital transactions.

In the first stage the want-to-be venture-backed company (the “Company”) presents its business plan and provides a lot of general information about the Company to the venture capital firm (the “VC”). During this stage VCs generally will not sign confidentiality agreements, so it is important that the Company withhold information which would constitute trade secrets or would destroy its ability to secure important patent protection at a later time.

The second stage begins when the VC becomes interested in moving forward with the investment transaction and a term sheet is negotiated and executed. The term sheet may contain confidentiality provisions, or a separate non-disclosure and non-use agreement may be signed, but either way at this stage formal confidentiality obligations on the part of the investor are put in place.

Full Story: http://www.localtechwire.com/article.cfm?u=12871